In Google Analytics, there is a report (still in beta), called the lifetime value report through which you can measure the lifetime value (also known as LTV) for website users / mobile app users.

Lifetime value is the projected revenue (sales), a person may generate during his/her lifetime, as a customer, for your business.

Through the lifetime value report, you can understand, how valuable website / mobile app users are to your business.

You can also compare the users acquired through different marketing channels (organic search, paid search, etc) to determine the channels which bring high-value users to your website.

In Google Analytics, the lifetime value report is available in both ‘Website View‘ and ‘Mobile App view‘.

Follow the steps below to access the lifetime value report in the ‘Website view’:

Step-1: Login to your Google Analytics account.

Step-2: Navigate to the view which has been collecting ecommerce data.

Step-3: Navigate to Reporting tab > Audience > Lifetime value:

Follow the steps below to access the ‘lifetime value’ report in a mobile app view:

Step-1: Login to your Google Analytics account.

Step-2: Navigate to the mobile app view which has been collecting ecommerce data:

Note: You can use the mobile app view only when you have set up mobile app tracking

Step-3: Navigate to Reporting tab > Audience > Lifetime value:

Going forward whatever I explained about the lifetime value report is equally applicable to both website users and mobile app users.

Components of the Lifetime Value Report

Following are the various components of this report:

1. Acquisition Date Range
2. LTV metrics
3. Compare metric
4. Graph
5. Data table

Pay special attention to the various highlighted components of a lifetime value report:

Acquisition date range

The acquisition date range is the duration during which the website / mobile app users were acquired:

Any user which is acquired during this date range is included in the lifetime value report.

If you want to analyse the users acquired during the most recent single-day campaign then set the acquisition date range to ‘Yesterday’:

If you want to analyse the users acquired during the most recent 1-week long campaign then set the acquisition date range to ‘Last Week’:

Similarly, if you want to analyse the users acquired during the most recent 1-month long campaign then set the acquisition date range to ‘Last 30 days’

You can also set a custom acquisition date range. 

For example, if you want to analyse the users acquired during a campaign which ran from say March 1, 2015 to Feb 1, 2016, then you can do that by selecting ‘custom‘ from the date range drop-down menu, as shown below:

Lifetime Time Value (LTV) metrics

The following seven LTV metrics are available in the lifetime value report:

1. Appviews per user (LTV) – applicable only for mobile app users
2. Pageviews per user (LTV) – applicable only for website users
3. Goal completions per user (LTV)
4. Revenue per user (LTV)
5. Session duration per user (LTV)
6. Sessions per user (LTV)
7. Transactions per user (LTV)

Note: Here, the user refers to your website / mobile app user.

Appviews per user (LTV)

It is the cumulative average appviews per user.

This metric is calculated as:

Cumulative Average Appviews per user (LTV) = Cumulative Appviews (LTV) / Users

Here,

A cumulative metric is the one, whose value increases by successive additions over time.

Users => total number of app users acquired during the selected acquisition date range.

For example:

Appviews (LTV) = 12,613

Users = 409

Cumulative Average Appviews Per User (LTV) = 12,613 / 409 = 30.84

The graph below shows the cumulative average appviews in the first 30 days after acquisition:

Day 0 shows the cumulative average app views of users on the day of acquisition.

Day 1 shows the cumulative average app views of users on the first day after acquisition.

Similarly,

Day 29 shows the cumulative average app views of users on the 29th day after acquisition.

Since all of these 30 data points represent cumulative average metric, the last data point (29th data point) in the graph above represents the cumulative average appviews, which is also reported in the data table of the lifetime value report:

If you want to see the x-axis on the graph to show one data point for each week, instead of one data point for each day, then select the ‘week’ tab:

So if you select acquisition date range of last 30 days then you will see five 5 data points on the graph, where each data point represents one week:

Week 0 shows the cumulative average app views of users in the week when they were first acquired.

Week 1 shows the cumulative average app views of users in the first week after acquisition.

Similarly,

Week 4 shows the cumulative average app views of users in the fourth week after acquisition.

If you want to see the x-axis on the graph to show one data point for each month, instead of one data point for each day or week, then select the ‘month’ tab:

So if you select acquisition date range of the last 30 days then you will see only one data point on the graph, which represents a month:

Note: Google Analytics calculates, cumulative LTV metrics for up to the first 90 days after acquisition.

Pageviews Per User (LTV)

It is the cumulative average pageviews per user.

This metric is calculated as:

Cumulative Average Pageviews per user (LTV) = Cumulative Pageviews (LTV) / Users

Here,

Users => total number of non- mobile app users acquired during the selected acquisition date range.

The graph below shows the cumulative average pageviews in the first 30 days after acquisition:

Day 0 shows the cumulative average pageviews of users on the day of acquisition.

Day 1 shows the cumulative average pageviews of users on the first day after acquisition.

Similarly,

Day 30 shows the cumulative average pageviews of users on the 30th day after acquisition.

Since all of these 31 data points represent cumulative average metric, the last data point (31th data point) in the graph above represents the cumulative average pageviews, which is also reported in the data table of the lifetime value report:

If you want to see the x-axis on the graph to show one data point for each week, instead of one data point for each day, then select the ‘week’ tab:

Similarly, if you want to see the x-axis on the graph to show one data point for each month, instead of one data point for each day or week, then select the ‘month’ tab.

Goal Completions Per User (LTV)

It is the cumulative average goal completions per user.

This metric is calculated as:

Cumulative Average Goal Completions per user (LTV) = Cumulative Goal Completions (LTV) / Users

For example:

Cumulative Goal Completions per user (LTV) = 58,030 / 15,605 = 3.72

Revenue Per User (LTV)

It is the cumulative average revenue per user. This metric is calculated as:

Cumlative Average Revenue per user (LTV) = Cumulative Revenue (LTV) / Users

Session Duration Per User (LTV)

It is the cumulative average session duration (in seconds) per user. This metric is calculated as:

Cumulative Average Session Duration per user (LTV) = Cumulative session duration (LTV) / Users

For example:

Cumulative session duration (LTV) = 1611:31:01

1611 is the number of hours,

31 is the number of minutes

1 is the number of seconds

Let us convert hours and minutes into seconds.

1611 hours * 3600 = 5799600 seconds

31 minutes * 60 = 1860 seconds

So, Total number of seconds = 5799600 seconds + 1860 seconds + 1 second = 5801461 seconds

Now,

Cumulative session duration (LTV) = 1611:31:01 = 5801461 seconds

So,

Session Duration Per User (LTV) = 5801461 seconds / 120,480 users = 48.15 seconds per user = 00:00:48

Sessions Per User (LTV)

It is the cumulative average sessions per user. This metric is calculated as:

Cumulative Average Sessions per user (LTV) = Cumulative Sessions (LTV) / Users

Transactions Per User (LTV)

It is the cumulative average transactions per user. This metric is calculated as:

Cumulative Average Transactions per user (LTV) = Cumulative Transactions (LTV) / Users

Comparing LTV metrics

To compare LTV metrics with each other, click on the following plus ‘+’ button next to the LTV metric, then select the metric you want to compare from the drop-down menu:

Here we are comparing ‘Transactions Per User (LTV) with the ‘Tenure’ metric.

‘Tenure’ is the number of users who have been with your business for a particular time duration (days, weeks, or months).

Dimensions in Lifetime Value Report

Following four dimensions are available in the lifetime value report:

1. Acquisition Channel
2. Acquisition Source
3. Acquisition Medium
4. Acquisition Campaign

These dimensions help you in analyzing the various LTV metrics in a different context.

Note: You can’t apply a secondary or custom dimension to the lifetime value report.