Predicted Life-Time Value (pLTV)

Two parts forming Predicted Lifetime Value:

The analytical engine predicts every app user's LTV for a future time period. For example, using Assetario, it will be simple to make an accurate Day 60 LTV prediction based on three days of historical data. The tool delivers at least 90% cohort-accurate LTV predictions and adjusts the forecast period accordingly. On the largest app, Assetario PLTV can predict up to Day 180 LTV for every user within the first seven days.

With the Assetario PLTV dashboard, you can predict the future outcome of every marketing campaign. Decision-making for a marketing manager will become a no-brainer with PLTV Dashboard which is there to visualise the results and provide multiple points of view. The accuracy of the predictions depends on the amount of data provided. For more details, please check the Data Requirements.

Application of LTV

Lifetime Value is a key variable in revenue forecasting. Each new user brings additional revenue per month and throughout their projected ‘lifetime’.

Your company can also use LTV to determine the marketing budget. Adding LTV segments to your user personas will help you get a better view of the importance of each user. Specifically, the User Acquisition Cost (UAC), the cost of acquiring one new user, for each segment should always be lower than the Lifetime Value of a new user.

For example, if your company is considering lowering the price point for one of the product segments, but estimates that the new Lifetime Value of a user of that segment will be lower than the current UAC for that segment, then creating that price point is an unsustainable business decision.

Another key area where LTV can be applied is resource allocation for current users. Once you are able to segment your users according to their LTV, you can allocate more resources toward both the acquisition and maintenance of certain users. Users with high LTV should receive more resources depending on what stage of the lifecycle they are in, especially if they are nearing the end of the cycle with potential for renewal. On the other hand, it is possible to react to users with a small PLTV to reactivate them without the risk of discounting too heavily across the user base.