App metrics, explained
The numbers we look at first when we review an app.
- MRR
- Monthly recurring revenue. What subscriptions bring in every month, with yearly plans spread over twelve months.
- ARPU
- Average revenue per user. Revenue divided by all active users, paying or not.
- LTV
- Lifetime value. What a user is expected to pay you over the whole time they stay.
- CAC
- Customer acquisition cost. What you spend on marketing to win one new user or payer.
- Churn
- The share of paying users who cancel in a given period.
- Conversion
- The share of users who start a trial or pay, measured from install or from paywall view.
- D1 / D7 / D30
- The share of a cohort that opens the app again 1, 7 and 30 days after install.
The one rule
LTV has to be clearly higher than CAC. If it is not, growth costs you money instead of making it.