Lifetime Value in Website Analytics

Measuring the lifetime value (LTV) for website users 

Notably, you can measure the Lifetime Value (LTV) for users acquired through your different analytics channels. Whereas, the Lifetime Value Report lets you understand how valuable different users are to your business based on lifetime performance.

For example, you can see lifetime value for users you acquired through email or paid search. Not to mention, with that information in hand, you can determine a profitable allocation of marketing resources to the acquisition of those users.

Additionally, you can also compare the lifetime values of users acquired through different methods. For example, you can compare users acquired through organic search and users acquired through social, or compare social to email, to see which method brings the higher-value users.

Analyzing your Lifetime Value data

To open the Lifetime Value report:

  1. Sign in to Google Analytics.
  2. Navigate to your view.
  3. Open Reports.
  4. Select Audience > Lifetime Value.

For your information, the Lifetime Value data is available in all Analytics accounts. No changes to the tracking code are necessary.

Further, Lifetime Value data is cumulative for users acquired during the acquisition date range you’re using. The data is not intended as predictive.

This report is available on app views and web views. Whereas, data for web views have been available from March 1st, 2017 onward.

Time elements

There are two-time elements in the Lifetime Value report.

Acquisition date range

Set this date range to identify the date range during which you acquired users. For example, you might want to examine data for users who were acquired while you were running a single-day campaign on Black Friday.

Or a week-long campaign from December 18 to December 24. This setting establishes the cohort that you’ll examine in the report.

The x-axis in the graph

Lifetime value is currently a maximum of 90 days. The X-axis of the graph is divided into increments (Day, Week, Month) of that 90-day period, starting with the date of acquisition, which can be any time during the Acquisition Date Range. The graph illustrates how cumulative metric values change over the user lifetime.

Google Analytics Lifetime Value.webp
Graph of Appviews per User and Goal Completions per User.

How metrics are calculated

Important to realize, this report presents the data as the cumulative average value per user per the time increment you are using (day, week, month).

For example, if you are evaluating Sessions per User on a daily basis, then the report shows you one value per day that represents the average number of sessions per user.

Lifetime value is calculated using the cumulative sum of the metric value divided by the total number of users acquired during the acquisition date range.

For example, if you acquired 100 users during the acquisition date range, then Sessions Per User is calculated as follows:

Header First Day Second Day Third Day
Cumulative sessions per day 100 200 300
Sessions Per User 100 sessions /100 users =

1 session per user

200 sessions /100 users =

2 sessions per user

300 sessions /100 users =

3 sessions per user

You can examine conversions (transactions, goal completions), revenue, and behavior (sessions, session duration, app views).

Lifetime Value Metrics

Use the Metric menus to select which metrics you want to compare in the report.

Menus to select comparative metrics

Available metrics

The following metrics are available in the report:

  • Appviews Per User (LTV)
  • Goal Completions Per User (LTV)
  • Pageviews Per User (LTV)
  • Revenue Per User (LTV)
  • Session Duration Per User (LTV)
  • Sessions Per User (LTV)
  • Transactions Per User (LTV)

Understanding metrics in the graphs and tables

Graph

The graph illustrates the lifetime value per user for the metrics over a period of 90 days, in increments of days, weeks, or months. For example, if you’re working with the App Views per User (LTV) metric, during Week 1, the average number of views might be 16; during Week 3, it might be 22; and by Week 10, it might reach 35.

Graph of cumulative metric values over time

Table

Metrics in the table are distributed by the dimension you choose (Acquisition Channel in the example below).

The table includes the number of Users you acquired during the Acquisition Date Range, along with two additional aspects of the metric you selected for the report, for example:

  • Appviews per User (LTV): Average Appviews per user over lifetime
  • Appviews (LTV): Total Appviews for all users over lifetime
Tabular representation of metric values

Dimensions

Use the Dimensions menu to select the context in which you want to examine your metric values.

Lifetime Value
Open Dimension menu

As an example, if you’re looking at Sessions Per User (LTV), you might want to know which channel delivered the highest number of sessions per user.

(This report uses Analytics’ default channel definitions, and associates users with their channels of acquisition.)

Finally, if you’re looking at Revenue Per User (LTV), you might want to understand which medium is responsible for acquiring users with the highest average revenue.

For your Lifetime Value Takeaway,

Surprisingly, like any business, you want to keep track of the level of user interest. Moreover, if the numbers are consistently in line with your expectations, you’ve found your sweet spot.

If the numbers are below expectations, reevaluate your marketing efforts to see whether you’re targeting the appropriate audiences and whether your ads are winning auctions. You can also look for any negative press or social content that might affect traffic.

Even if all the marketing and social buzz are positive, you may be creating technical hurdles for your users with your site or app design. In cases where you have a lot of 1-Day Active Users but the numbers drop off for long term users, that can signal things like problems with a new release, or that initial enthusiasm isn’t translating into long-term engagement.

Generally speaking, lots of users might be downloading an app but are finding that it doesn’t really meet a need they have or that it doesn’t capture their interest.

Resourceful References;

  1. The jmexclusives Online: Training and Learning Guides
  2. Analytics Help: See the number of active users for your site or app
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