How do you measure how you are generating revenue? Use the following metrics / Key Performance Indicators also known KPIs.

  1. Average Revenue Per User (ARPU)

The average amount of value or cash generated per user via in-app purchases, ad impressions or clicks, subscriptions, paid downloads, or other form of monetization. Multiplied by the size of the user base or the number of active users this figure gives a good rough idea of the value of the app as a whole.

You can calculate ARPU

>>>>  Lifetime Revenue / # of Users

  1. Lifetime Value (LTV)

The lifetime value of a user is amount of revenue they’ve generated for your app thus far; combined with the average revenue per user it can be a great way to determine the total prospective revenue or value of an app.

You can calculate LTV by

>>> Avg value of a Conversion X Avg # of Conversions in a Time Frame X Avg Customer Lifetime

  1. Time to First Purchase

This KPI implies the amount of time it takes a user who has downloaded and installed the app to make a purchase, whether that is an in-app purchase, an eCommerce purchase, or buying the premium or otherwise upgraded version of the app.

You can calculate TFP by

>>> Date/Time of First Purchase – Date/Time Registered (in days)

  1. Customer Acquisition Cost (CAC)

The cost of acquiring a new customer, e.g. the money spent advertising your app, including the time factored in for marketing costs (time is money, after all). You can determine this number by dividing the total gross revenue during a given time period by the sales and marketing costs incurred during the same time period.

You can calculate TFP by

>>> Cost of Acquiring a New Customer / # of New Customers

  1. Cost Per Acquisition (CPA) 

The cost per acquisition of a conversion. This doesn’t necessarily imply the conversion comes from a new customer, but from a new behavior such as signing up for a subscription, upgrading to a premium or higher level, in-app purchases, or giving new permissions.

You can calculate TFP by

>>> Cost / # of Acquisitions

  1. Customer Lifetime Value (CLV)

The lifetime value of a customer based the net profit they generate over time, which in this case is based on their spending in and on the app in proportion to the cost required for their acquisition. A user pool with a high average CLV is a tremendous asset for a mobile app, and keep in mind that successful apps tend to have an excellent CLV to CAC ratio.

You can calculate TFP by

>>> Avg value of a Conversion X Avg # of Conversions in a Time Frame X Avg Customer Lifetime

  1. eCAC (Effective Customer Acquisition Cost)

The actual or effective cost of acquiring new customers, including organic discovery methods, paid advertising, and time spent or other expenses incurred during the marketing process. This can be calculated by comparing the number of new customers to the total number of impressions generated by marketing campaigns, and factoring in the cost of those campaigns to achieve a final number.

  1. eCPM (Effective Cost Per Mille)

The actual cost per 1000 impressions or actions, including organic and paid marketing efforts along with the cost of time spent or other expenses incurred. This can be calculated by factoring in the number of impressions or views generated by marketing efforts divided by the number of customers gained.

Cost for Advertising X (Impressions / 1000)

  1. Paid Conversion Rate 

The rate of conversion via paid advertising, include PPC advertising, display ads, social media ads (e.g. promoted Tweets or boosted Facebook posts), sponsored posts or reviews, or any other method of marketing your mobile app that involves a direct exchange of money for mentions or views.

  1. Return On Investment (ROI)

In this case, the return on investment for any marketing tactics or techniques, calculated by dividing the number of gains in customers or revenue that you generated by how much you spent on marketing, including time spent or any expenses incurred.

(Gain from Investment – Cost of Investment) / Cost of Investment