This article will help you:
Successfully acquiring, engaging, and retaining new users won't help your company grow if you can't monetize them. With Amplitude's Revenue Long-Term Value (LTV) chart, you can easily see how well your organization is doing this, using common, relevant, easy-to-understand revenue metrics.
The Revenue LTV chart is a new-user monetization analysis, with a time horizon of as much as twelve months into the past. Use it to see how quickly and effectively different segments of new users are transitioning to paying users, and to set benchmarks and goals for new user monetization going forward.
Before you begin
First and foremost, events will not appear in any Amplitude charts until instrumentation is complete, so make sure you've got that done. You'll definitely want to read our article on building charts in Amplitude, as this is where you'll learn the basics of Amplitude's user interface. You should also familiarize yourself with our helpful list of Amplitude definitions.
More specifically, you should ensure your client-side and server-side revenue events have a $revenue property. Without it, the Revenue LTV chart will be unable to display any results.
Also, check out the Tracking Revenue documentation to learn how to track revenue events. For example, if you're using Amplitude's SDKs, you will have to call logRevenueV2() in conjunction with the provided revenue interface. If you're tracking in-app purchases (IAPs), we recommend using Amplitude's revenue authentication system.
Finally, keep in mind that Amplitude does not currently support currency conversion. The revenue value you send Amplitude is what will be aggregated and displayed. If you get revenue in different currencies, we recommend normalizing to a single currency before you send any revenue data to Amplitude.
Set up a Revenue LTV chart
Like most other Amplitude charts, the Revenue LTV chart has an Events Module. However, in this chart, there is only one event available: [Amplitude] Any Revenue Event. You can segment on the event itself by adding properties to it in the Events Module.
To build a Revenue LTV chart, follow these steps:
- Add properties to the revenue event by clicking on + where, selecting the property name, and specifying the property value you’re interested in. You can add as many properties as you like, though you'll have to add them one at a time.
NOTE: these properties must be explicitly sent by you via Amplitude's SDKs when you log revenue events.
Amplitude stores revenue properties as event properties with a '$' sign prefixed. There are five to choose from:
- $price: The price of the products purchased
- $productId: A product-specific identifier for each item purchased
- $quantity: The quantity of products purchased
- $revenueType: The revenue category—common values include income, tax, refund, etc.
- $eventProperties: An object of event properties to include in the revenue event
- In the Segmentation Module, identify the user segment you want to include in this analysis. You can import a previously-saved segment by clicking Saved Segments and selecting the one you want from the list. Otherwise, Amplitude begins from the assumption that your analysis will target all users.
- If you do not want to import a previously-saved user segment, you can start building your own by adding properties. To do so, click + where, choose the property you want to include, and specify the property value you’re interested in.
- You can narrow your focus even further by telling Amplitude you only want to include users who have already performed certain actions. To do so, click + perform, then choose the event you’re interested in.
- If desired, add another user segment by clicking + Add Segment, and repeating steps 3 and 4.
- In the Metrics Module, choose the metric you'd like to use for this analysis.
- Total Revenue: This shows the total revenue received during the timeframe of your analysis. Specifically, it's the sum of all total revenue from all new users, beginning the day they sent their first Amplitude event. You can break this out on an hourly, daily, weekly, monthly, or quarterly frequency, which we'll get to in the next step of this process.
- New Paying Users: This shows the number of users who fired a revenue event for the first time during the specified hour/day/week/month after their cohort's start date.
- ARPU: Short for average revenue per user, this is a new user cohort's cumulative total revenue as of the hour/day/week/month you're looking at, divided by the number of users in the cohort.
- ARPPU: This is the same as ARPU, except it considers paying users only. A paying user is a user who's had a revenue event at some point in time.
NOTE: Each of these metrics only looks at users who were new to Amplitude during the timeframe of your analysis. However, they do not have to have fired a revenue event to be included, except for ARPPU.
- Use the date picker to set the timeframe of your analysis.
Interpret your revenue analysis
It's important to keep in mind that Revenue LTV is a monetization analysis focusing on new users only. Forgetting this could easily lead to some off-base interpretations of your data.
For the purposes of this section, let's assume you selected a Daily frequency breakdown in step 7 of the previous section. It could just as easily be hourly, weekly, monthly, or quarterly, and the underlying logic would be the same.
Each day shown on your Revenue LTV chart displays your selected metric for a specific cohort of new users. For example, the total revenue amount shown on Day 1 is the total revenue collected from users whose first Amplitude event was sent between 24 and 48 hours ago (Amplitude considers the first 24 hours after the firing of that initial event to be Day 0); the same metric on Day 5 shows total revenue collected from users whose first event was sent between 120 hours and 144 hours after firing that initial event.
(If your chart is looking at weekly intervals, then your users are collected into weekly buckets extending from Monday to Sunday.)
The Revenue LTV chart, therefore, is cohort-based: users who are new on the same day are placed into the same user cohort. Each data point shown on the chart is an average of all of the Day N metrics from a specific new user cohort. These cohorts are visible in the breakdown table below the chart; click the triangle next to All Users to expand.
You can set up and interpret any Revenue LTV chart easily, as the user interface allows you to read the parameters like a sentence. For example, the following chart shows you a visualization of all revenue events fired by your users, measured by the average revenue per user daily in the last 30 days.
You can also hover over the individual data points to see the actual amounts. Here, the average Day 3 ARPU for new users in the past 30 days is $0.56.