New calculator: Financial forecasting for subscription apps

[Emory Scott]

Our new subscription app calculator computes expected ROAS and LTV to help studios make decisions about when to invest in paid user acquisition. It also forecasts cash flow of the app given different budget scenarios and models the use of credit facilities to support faster reinvestment into ROI positive ad spend.
This new calculator helps app developers understand whether their UA machine is profitable and scalable. While it’s well understood that lifetime value (LTV) is a very important app metric, it can sometimes be difficult to calculate, especially for subscription apps with multiple price points, plan lengths, and churn rates.
The tool offers developers a visualization of LTV and cash flow scenarios based on a series of simple inputs. By inputting their app’s subscription plans and CPPU (cost per paying user) or CPI (cost per install), the app developer sees a model of their LTV curve, and a set of customized financial projections. These enable a greater understanding of the potential revenues of their app based on a rigorous approach to only investing in paid UA channels when they are ROI positive.
Developers can easily visualize whether they are currently, or could be, making money from their app – a goal that demands an alignment between user acquisition goals and actual spend to achieve profitability. “If the subscription app’s numbers add up, then the calculator will help illustrate the financial outcomes that are possible by spending money on profitable UA channels.” notes Martin Macmillan, CEO and founder of Pollen VC.
“Our goal is to help studios and developers understand what their metrics really mean, and importantly how to act on them to benefit their business when the conditions are right. When users can be acquired profitably, Pollen VC can provide additional capital to fuel the app’s growth in a capital efficient way. By adding liquidity into the app ecosystem and helping successful apps grow more quickly, everyone benefits – platforms, ad networks, attribution providers and, most importantly, the developer.”, concludes Macmillan.

[Joseph Parsons]

I can advise you to pay attention to this information https://adapty.io/subscription-calculator/ , where I learned about the subscriber calculator. I can also add that the conversion rate is roughly inversely related to the price: if the price goes down, the conversion rate goes up. This relationship is a kind of demand curve. You can increase the conversion rate without changing the price. This can be done, for example, by adding new features, improving the app, or changing the location of the point of purchase.

[Author]

Posts