LTV, the lifetime value of a customer, is one of the most important metrics for game developers to keep track of. It is the ultimate benchmark of how your game is doing in terms of revenue, and it informs how you invest your budget and how you design your retention and re-engagement strategies. Even though this metric is so crucial, there are too many game developers who fail to give it the attention it’s due. And while there are lots of ways to calculate LTV, I’d like to share with you a few ways in which you can increase LTV.
But first...leverage multiple platforms
Before you get into the nitty gritty of making your users’ LTV go gangbusters, first make sure that you have as many users as possible by leveraging all three major platforms -- iOS, Android, and Amazon. Who cares if the LTV for a user is sky-high but you can count your daily active users (DAU) on one hand? We see it over and over again -- as soon as a developer makes their game available on each platform, they increase revenue dramatically because they make incremental revenue by accessing more users. If you’re tight on resources, I usually recommend cross-platform development tools like Corona, Unity, Adobe Air, or Unreal -- they make developing cross-platform straightforward and easy. Going across multiple platforms and working with separate app stores will take more time when doing things like setting up the screenshots and updating descriptions every time you release an update, but it’s well worth it.
Once you achieve scale, you can do more reliable cohort testing, and you’ll want to make sure the sample size is big enough so your results have more signal than noise. This will be crucial as you pull levers to increase and tweak your LTV metrics.
Find the sweet spot with game difficulty
As with any game, the more people play, the greater the chance that they will spend, often by buying currency. But the ticket to getting more people to play and keep playing, is to get the game difficulty just right -- challenging enough to be engaging, but not so challenging that users get frustrated and abandon it. Doing cohort testing (also known as cohort analysis, split or A/B testing) can help you determine the optimum level of difficulty: the one where users feel challenged but continue to buy currency to keep playing because they are enjoying themselves. For example, set a control variable at the difficulty where you think it should be and call it Variable A, with its own cohort. Then test other cohorts with different levels of difficulty against cohort A, and methodically vary them until you find the level of difficulty that maximizes engagement and revenue.
Use split testing in other areas like testing format, frequency, and placement of ads, or optimal rates for currency promotions. Services like LeanPlum or Optimizely can make this easy.
Keep it server side
A good rule of thumb is whatever you can do server-side (rather than client-side), do it. First there is the benefit of size. Smaller apps are better for emerging markets, which tend to have slower mobile networks, and users with less available space on their phones. But the biggest benefit is that you are able to run cohort tests on promotions, events (more on these below), or even fix bugs without having to go through the various app store submission processes and then waiting for the user to update. Server-side architecture will help you immeasurably.
Host in-game events
Users respond well to tournaments, sponsored events, and holiday events. They can do wonders for user LTV because they affect both retention and average revenue per DAU (ARPDAU). If you’re working server-side (as you should!), I recommend that you do events weekly. Alternatively, if you chose to ignore my advice and your game relies on client-side mechanics, you can cycle them in with every update or every other update.
Track down funnel events from acquired users
When it comes to increasing LTV, it’s really important to know the ARPU from each traffic source so you can figure out if you are over- or under-paying for users. Obviously if you find that one source is giving you amazing ARPU, you want to adjust your budget so you maximize the number of users you’re getting from there, and ROI in general. Buying a user for $10 or $20 may seem expensive, but if they spend $30, that’s a deal anyone would make. Simultaneously with pockets of inventory that are giving you low ARPU, you want to lower your bids to a point that will get you to your ROI standards or remove your bids altogether.
Don’t forget social media marketing
Building a dedicated community through social media can do wonders for your LTV because it allows users to share their game-related triumphs (Look at my high score on Instagram!), thereby building enthusiasm and publicity for your product, not to mention loyalty. A social media presence can also function as a work-around or alternative to reviews in the app store. If a user has an issue with your product, they can let you know via Twitter or Facebook -- and you can respond quickly and show them that a real person is behind your product, and that person cares and will fix the problem. Nine out of ten times, a personal interaction will defuse a potential negative reviewer’s ire, and you won’t get a negative review.
Games that do social media really well include Game of War, Criminal Case, and Crossy Road, so take a look at those and you’ll get some good ideas for how to build loyalty and increase LTV. Just make sure to follow relevant terms and conditions for the various app stores and social platforms: you can’t bribe users into “liking,” sharing, or for writing reviews.
All of these methods for increasing LTV are straightforward -- many are even easy -- but don’t let that fool you: each one can have a significant effect on your revenues, and collectively, they can put you on very solid ground in terms of ROI.