Given that subscription revenue models aren’t one-off payments, one of the most important factors when it comes to ROI and the customer lifetime value is churn:
Churn rate is an essential metric to track for mobile apps as it plays a key role in other key metrics such as lifetime value (LTV), retention rate, profitability, and so on. For a mobile app to grow, the number of users staying on the app must be higher than the number of users that uninstall it. And for an app to be profitable, its churn rate must stay low.
This means that marketers need to not only optimize for customer acquisition costs (CAC) but also acquire the right customers that are likely to have a higher LTV, largely by not churning. To do so, marketers should consider the following factors:
Targeting & segmentation: As mentioned, a higher LTV and lower churn can make all the difference between a profitable and unprofitable subscription business, which means that targeting and audience segmentation are essential to acquiring the right customers.
Customer retention: Marketers can also use subscription data to improve retention by identifying and reaching out to at-risk customers and offering them incentives to stay.
As you can see, tracking and analyzing customer data is essential to improving the ROI of subscription-based businesses.