Shorter Payback Period: Sustained profit growth
Optimizing the LTV curve and conducting iterative testing are essential for ensuring sustainable growth in games. Even before achieving the desired profitability on this curve, the payback period plays a pivotal role. Payback analysis acts as an early validation tool for the LTV model, highlighting potential discrepancies between projected and actual user behavior. Moreover, a shorter payback period enables quicker recovery of marketing investments, paving the way for scaling efforts and sustained profit growth. Dynamics of LTV, CAC, as you all know: It’s a fundamental financial principle to aim LTV that is higher than Customer Acquisition Cost (CAC) to ensure profitability in the long term. While this equation seems straightforward, it hides critical questions about its underlying components. Games thrive on concurrent users—players who return frequently and are incentivized to spend. However, relying on extended user lifetimes carries inherent risks in marketing. When working with […]