App Marketing · Facebook Ads

How much do you value acquiring a single user for your application?

Mina Abdou Looking for a CTO role.

June 12th, 2020

Hey all,

I wanted to ask all the founders/co-founders with mobile applications out there how much you value a single app install.

I am trying to gauge how much app startups would be willing to pay to acquire users if they were charged a per/user cost. Also, does this number change if you were targeting paying users vs. non-paying users, and how so?

Richard Schwabe Looking for CTO Roles

June 13th, 2020

Running a few mobile apps myself, not really as a startup or service, but more as a portfolio commodity, these are my thoughts:

Just like so often the answer is probably: It depends.

I'd boil it down to the basics: CAC < LTV (The customer acquisition costs need to be lower than the life time customer value)

Most mobile apps are only used 3 months at most by a single user.

These are very individual numbers for each mobile app. A subscription based model will have a much higher LTV as an ad based model. However, Ad based combined with In App Purchases (IAP), could also outperform the Subscription based model, when it comes to addictive games and short term users.

Therefore it seems difficult to make a statement about the general consensus.

Without having a conversation with the customer and finding out their LTV, I guess you could matrix something along the lines of:

Subscription > In App Purchases -> Ad Based -> Free and judge their mobile app based on this to approach them.

On the other hand, in very early stages I would also care more about users that write reviews and provide good ratings to the app. So I think the CAC limit that a company is willing to "accept" varies over time.

In addition, the times are long gone, where a small company, indie developer or anyone can publish an app on the AppStore or Google Play store and be immediately recognised. Most blogs/tech magazines etc won't even consider reviewing an app and write about them. Instead, they write about the "big apps", that are already "chosen" by the stores as a highlight or charge you a bit of money. Which all adds up when a new app launches and contacts 50 magazines etc. (Whether that makes sense is a different discussion, just an example)

My point being: There are many factors that come into play to find an "acceptable" number/ratio/formula for your question.

I wish you best of luck, would love to hear how you went about it.