LTV > CPI - a quick & dirty approach to calculate LTV

This is a five minute note about how to calculate mobile app LTV of a specific cohort

Number of total acquired users = 600

Number of churned users per day. This can be found out via Churnrate = 1- retention rate
Day 1 --> 100
Day 2 --> 200
Day 3 --> 300

We assume they churn at the end of the day and that every user that does not churn is active on each day.
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Therefore number of days active or DAU is the following
Day 1 --> 100
Day 2 --> 400
Day 3 --> 900

Total days on which users have been active is therefore 1400 days (which equals DAU)

We assume that ehe sum of total revenues on those three days 140 €

Therefore ARPDAU = Revenues / DAU = 0.10cents

Average Life Time (LT) = Total days active / total users = 1400/600 = 2.3

LTV = average LT * ARPDAU = 2.3* 0.1cents = 23 cents

If we assume that 23 cents is excluding VAT (gross revenues) we have to deduct appstore fee
the net LTV is 16 cents

LTV > CPI (cost per install) is actually not quite ok, because we have to include a certain margin based on your costs

Based on current CPI's at ~ 2-3 $ or Euro, this seems unrealistic. What are solutions?

In case the game is viral or gets featured by Google / Apple by a factor of 6 , then LTV in theory goes to 1.40€. If you are able to meet a net LTV of 1€ then fine

Getting featured
This is a no brainer

Push Campaigns
Has been discussed many times. Problem is the incentivized installs f*ck your stats

Buying targeted
This means you are able to target those users which have a high LTV. There are certain companies that label this user acquisition strategy as "predictive LTV". We will see how it pans out