growth - Mervyn Chua

Retention & LTV: The Untapped Growth Engine for Sustainable App Success

Struggling with app growth? 🚀 It’s not just about downloads—retention & customer lifetime value (LTV) are the real game-changers. Discover proven strategies to keep users engaged, maximize LTV, and build a sustainable, high-growth app. Read now! 🔥

Quick story from my younger days. When I was a kid, I was obsessed with playing Risk, the board game. My strategy? Pure domination. I’d go all-in on conquering as many territories as possible, expanding my empire at breakneck speed. But no matter how aggressive I played, I never won. Why? Because I was so focused on acquiring new lands I completely ignored retaining the ones I had already conquered. Eventually, my empire would crumble, leaving me frustrated and wondering where I went wrong.

Fast forward to today, and I see many mobile apps making the same mistake. They pour massive resources into acquiring new users, celebrating each new download like a conquered territory. But soon after, their users churn, engagement drops, and retention rates plummet.

The reality? Growth isn’t just about acquisition—it’s about retention.

According to Harvard Business Review, increasing customer retention by just 5% can boost profits by 25% to 95%. Yet, many apps continue to chase new downloads without a clear strategy for keeping users engaged and maximizing their lifetime value (LTV).

The mindset needs to shift. Sustainable app growth isn’t about how many users you can acquire—it’s about how many you can keep.

In this article, we’ll dive into:

✅ Why Retention & LTV are the real drivers of long-term app growth.

✅ Proven strategies to improve user retention and keep engagement high.

✅ How to maximize LTV and turn users into loyal, high-value customers.

If you’re serious about building an app that doesn’t just grow but thrives, let’s get into it. 🚀

Why Retention & LTV Matter for App Growth

Imagine pouring water into a leaky bucket—no matter how fast you fill it, the water keeps draining. That’s what happens when mobile apps focus solely on user acquisition without a retention strategy.

This is where the retention curve comes in. It tracks over time (stated in days/months on the X-axis) how many users stick around after downloading an app (stated as a percentage of the cohort on the Y-axis).

📊 A steep drop-off means high churn, leading to lost revenue and higher acquisition costs.
📈 Apps that flatten the retention curve by keeping users engaged see sustainable growth and higher profitability.

Why does this matter? Because longer retention leads to higher Customer Lifetime Value (LTV)—the total revenue a user generates throughout their relationship with your app. And the business impact is undeniable as stated by Harvard Business Review:

Acquiring a new customer is 5 to 25 times more expensive than retaining an existing one.
A 5% increase in retention can boost profits by 25% to 95%.

The message is clear: Sustainable app growth isn’t about how many users you attract but how many you keep and monetize effectively.

Strategies to Improve User Retention

1. Onboarding That Hooks Users

First impressions matter. Users who don’t see value in the first few minutes are likely to churn. A well-designed onboarding flow should:

✅ Be frictionless: Reduce sign-up steps and unnecessary inputs.

✅ Use interactive tutorials: Guide users through the app’s core value.

✅ Implement gamification: Offer rewards, streaks, or progress bars to encourage engagement.

✅ Set up habit loops: Introduce triggers (push notifications, in-app nudges) that bring users back naturally.

🛠 Example: Duolingo uses gamification in the form of bite-sized lessons and streak rewards, making language learning addictive from Day 1.

2. Personalization & Lifecycle Marketing

Generic marketing doesn’t cut it. Users expect personalized experiences tailored to their behaviour and preferences. Here’s how to do it:

✅ Behavioral segmentation: Group users based on in-app actions (e.g., frequent buyers vs. occasional users).

✅ AI-powered engagement: Predict churn and send targeted re-engagement messages at the right time.

✅ Multi-channel outreach: Use push notifications, emails, and in-app messages to maintain user interest.

✅ Leverage customer engagement platforms: Tools like CleverTap can help automate personalized messaging at scale.

🎵 Example: Spotify’s Discover Weekly leverages AI to personalize music recommendations, increasing user retention.

3. Community & Engagement

A strong sense of belonging keeps users coming back. Apps that foster community-driven engagement see higher retention rates. Strategies include:

✅ In-app social features: Enable discussions, groups, or friend-based challenges.

✅ User-generated content (UGC): Let users contribute content, reviews, or experiences.

✅ Referral & rewards programs: Incentivize users to invite friends and stay engaged.

✅ Feedback loops: Regularly collect and act on user feedback to improve the app.

🚴 Example: Peloton’s leaderboard system turns workouts into a community-driven competition, boosting retention.

Increasing Customer Lifetime Value (LTV)

1. Monetization Strategies That Work

To maximize LTV, apps must choose the right revenue model. Here are three proven approaches:

1️⃣ Subscription vs. One-Time Purchases: Recurring revenue models (like Netflix and Spotify) generate predictable income, while one-time purchases work for premium features.

2️⃣ Microtransactions & In-App Purchases: Popular in mobile gaming apps (e.g., Fortnite’s skins and battle passes) to drive incremental revenue.

3️⃣ In-App Ads (Without Killing UX): Striking a balance is key—offering an ad-free premium tier can also boost LTV.

📺 Case Study: Netflix’s Ad-Supported Tier

Netflix started with a pure subscription model, but to increase LTV and tap into price-sensitive users, they launched a lower-cost, ad-supported plan which hit 70 million monthly active users in 2 years. This not only expanded their customer base but also unlocked a new revenue stream from advertisers.

2. Loyalty & Referral Programs

Loyal users are your best marketers—they buy more, stay longer, and bring in new users. Here’s how to extend user lifetime engagement:

✅ Reward repeat usage: Offer perks for continued engagement (e.g., streaks, points, or exclusive content).

✅ Referrals for organic growth: Encourage users to invite friends in exchange for rewards.

✅ Ecosystem integration: Combine loyalty, payments, and partnerships into a single experience.

☕ Case Study: Starbucks Rewards

Starbucks built a powerful loyalty ecosystem by integrating:

✅ Mobile payments (seamless transactions)

✅ Exclusive perks (free drinks, personalized offers)

✅ Content partnerships (Spotify playlist curation)

The result? 60% of Starbucks’ U.S. transactions now come from its rewards program, driving both retention and LTV.

Want to find out how to improve ROAS the smart way backed by math? Click here to read more.

Final Thoughts

Retention and LTV aren’t just buzzwords—they’re the backbone of sustainable app growth.

🔹 Retention ensures your app doesn’t bleed users after acquisition.

🔹 Higher LTV means more profitability from each user over time.

🔹 A well-executed retention strategy lowers CAC (Customer Acquisition Cost) and creates a self-sustaining growth engine.

If you want your app to not just grow but thrive, shift your focus from downloads to long-term engagement.

👉 Now over to you: What strategies have worked best for you in improving retention and LTV? Let’s discuss in the comments! 🚀

Fall in Love With the Work, The Wins Will Come

Discover how a simple mindset shift—from chasing outcomes to embracing the process—transformed my approach to performance marketing, creativity, and long-term growth. A thought-provoking take on the quote: “Fall in love with the process and the results will follow.”

💡 Quote of the Week: “Fall in love with the process and the results will follow” — Bradley Whitford

I’d be honest. I used to chase end results like a man possessed — more income, more leads, more conversions, more possessions. It felt like progress. And in some ways, it was. But looking back, I realised I was constantly chasing the next high, hitting one target only to move the goalpost. It became a loop of short-term wins that left little room for joy, creativity, or meaningful growth.

Then I came across this quote:

“Fall in love with the process and the results will follow.” — Bradley Whitford

That hit differently.

What changed the game for me wasn’t a smarter hack or a better framework, it was a mindset shift. When I stopped obsessing over outcomes and started genuinely enjoying the work itself, something clicked. I found more clarity, more peace of mind, and ironically, better long-term outcomes.

Turns out, when you fall in love with the craft, the scoreboard starts taking care of itself.

🛝 Process is the Playground of Growth

Real, sustainable growth doesn’t come from one big breakthrough. It comes from showing up, testing, learning, and tweaking — day in, day out.

I’ve seen this play out in my work with A/B testing gaming video creatives. Sometimes the “ugly” variation outperforms the polished one. Sometimes what you think will convert ends up flopping. But every test is a data point, and every insight sharpens the next move.

Same with building growth loops — they rarely take off on the first try. But when you treat the process as a playground for discovery rather than a pressure cooker for instant wins, that’s when compounding magic kicks in.

Small daily inputs, repeated over time, create massive momentum.

🎨 Obsession with Outcomes Can Kill CreativityWhen you’re glued to dashboards and only chasing KPIs, it’s easy to default to “what’s safe.” You end up recycling what worked instead of exploring what might.

But when you genuinely love your product or your craft, something shifts. You start taking smart risks. You lean into curiosity. You play more, experiment more, and that’s when performance marketing actually gets exciting and effective.

Some of my most successful campaigns didn’t come from chasing the perfect CTR. They came from being fully immersed in the storytelling, the customer journey, and the creative process.

Loving the process made the work better and the results followed.

🏃🏻 Habits > Hype

Anyone can launch a flashy campaign. Not everyone can show up every day when things get hard or boring.

The best growth I’ve ever seen, both in business and in life, comes from unsexy consistency: tracking what matters, reviewing performance, asking better questions, making small tweaks, and doing it all over again.

Fall in love with those tiny actions, and you’ll build the resilience and systems that scale.

In the long run, quiet consistency beats viral hype every time.

💭 Final Thoughts

The best founders and marketers I know don’t just chase results — they live the process. They obsess over customer problems, they get excited about small wins, and they treat every test like a new opportunity to learn and grow.

In doing so, they don’t just build great businesses—they build unfair advantages.

Because when you love what you do, you don’t burn out chasing metrics. You build momentum that lasts.

📣 If you’re a fellow marketer or founder stuck in outcome-obsession mode, let’s connect.

I’m building a community of growth lovers who care more about the craft than just the clicks.

Let’s grow together — the right way.

Boosting ROAS the Smart Way: The Math Behind More Profitable Ads

Learn how to optimize ROAS with smarter strategies. Discover the math behind Return on Ad Spend and how improving Average Basket Size, Conversion Rate, and Cost Per Click can drive better ad performance and profitability.

I’d be honest. When I first moved into digital marketing from a background in math and quantitative finance, I saw things a little differently. While most marketers focused on creative storytelling and audience psychology (which are undeniably important), I naturally gravitated toward the numbers. I wanted to break down ad performance the way I would analyze financial models—through data, formulas, and strategic optimizations.

One of the biggest misconceptions I’ve seen in performance marketing is the belief that cutting costs alone improves Return on Ad Spend (ROAS). Many marketers think that slashing CPC (Cost Per Click) or reducing spending on “underperforming” campaigns is the key to profitability. But that’s only part of the equation.

ROAS isn’t just about how much you spend, it’s about how much value you generate from every dollar. And to truly optimize ROAS, you need to understand its mathematical makeup. In this post, I’ll break ROAS down into its three core components — Average Basket Size (ABS), Conversion Rate (CVR), and Cost Per Click (CPC), and show you the strategic levers you can pull to drive better ad performance.

Let’s get into it. 🚀

What is ROAS? (Defining the Formula)

Let’s start with the basics. Return on Ad Spend (ROAS) is one of the most critical metrics in performance marketing. It tells you how much revenue you’re generating for every dollar spent on advertising.

ROAS Formula:

For example, if you spend $1,000 on ads and generate $3,000 in revenue, your ROAS is $3,000 / $1,000 = 3

This means you’re earning $3 for every $1 spent.

While a higher ROAS is ideal, blindly optimizing for it by just cutting costs can be misleading. To truly maximize ad performance, we need to break it down further.

Breaking Down ROAS: The 3 Key Components

ROAS is influenced by three key factors:

1. Average Basket Size (ABS)

What it means: The average amount a customer spends per purchase.

Why it matters: If customers spend more per transaction, your revenue increases without needing more conversions.

2. Conversion Rate (CVR)

What it means: The percentage of visitors who clicked on an ad and made a purchase.

Why it matters: Higher conversion rates mean you extract more value from the same traffic.

3. Cost Per Click (CPC)

What it means: The cost of acquiring each visitor to your site.

Why it matters: Lowering CPC without sacrificing traffic quality means getting more conversions for the same budget.

Rewriting ROAS using these components:

This equation makes it clear: To improve ROAS, you need to increase ABS, improve CVR, or lower CPC. Let’s dive into how you can optimize each.

Strategies to Improve ROAS via Each Component

A. Increasing Average Basket Size (ABS)

Let’s take an e-commerce brand as an example. Instead of focusing on acquiring more customers, they increased revenue by maximizing how much each customer spends.

Tactics to Increase ABS

✅ Upsells & Cross-sells: Recommend complementary products (e.g., “Frequently bought together” or post-purchase upsells).

✅ Bundling: Offer product bundles at a slight discount to encourage higher spending.

✅ Free Shipping Thresholds: Set free shipping at a slightly higher value than the average order to push customers to buy more.

🛍️ Case Study: Ravin Boosting Average Basket Size (ABS)

Ravin, an online fashion retail brand, implemented Wiser’s product recommendation engine to enhance customer engagement. By displaying related and frequently bought together items on product pages, they achieved a 30% increase in conversions and a 12% increase in sales.

B. Boosting Conversion Rate (CVR)

Let’s say you’re running a subscription app. You get clicks, but many users drop off before converting. Improving CVR means turning more of those clicks into paying customers.

Tactics to Improve CVR

✅ Landing Page Optimization: Make checkout seamless, ensure fast-loading pages, and optimize for mobile.

✅ A/B Testing Offers & Creatives: Experiment with different CTAs, ad visuals, and pricing models to see what converts best.

✅ Trust Signals & Social Proof: Showcase reviews, testimonials, and security badges to reduce buyer hesitation.

🥗 Case Study: FastEasy Boosting Conversion Rate (CVR)

FastEasy, a mobile fitness app, faced challenges in efficiently conducting A/B tests for their campaigns. By integrating Reteno’s AI-powered marketing automation platform, they were able to run multiple experiments simultaneously without relying heavily on developers. This approach led to a 29% boost in conversion-to-subscription rates.

C. Lowering Cost Per Click (CPC)

A mobile gaming app wanted to scale its paid campaigns while maintaining profitability. Lowering CPC without sacrificing quality was the key.

Tactics to Reduce CPC

✅ Better Targeting: Use lookalike audiences, retargeting, and negative exclusions to focus on high-intent users.

✅ Ad Quality Score: Platforms like Google Ads reward high-relevance ads with lower CPCs. Improve ad copy, CTR, and landing page experience.

✅ Bid Optimization: Adjust bids based on performance insights such as time of day, device, and geo-targeting can significantly impact CPC.

🕹️ Case Study: Voodoo Games Lowering Cost-per-Install

Voodoo Games, a French mobile game publisher, by actively testing more than 500 videos a week for their hit game Mob Control, reduced their CPI and surpassed $200M in revenue at an average of 150% ROAS.

Final Thoughts: The Smarter Approach to ROAS

Improving ROAS isn’t just about spending more, it’s about spending smarter. By understanding the math behind ROAS and optimizing its key components — Average Basket Size (ABS), Conversion Rate (CVR), and Cost Per Click (CPC), you can make strategic, high-impact changes that drive better profitability.

At the core of all successful ad campaigns is data-driven decision-making. Testing, iterating, and refining based on real numbers, not just gut feelings, ensures that every dollar you invest works harder for you.

So, what’s your biggest challenge with ROAS? Drop a comment below, and let’s discuss! 🚀

User Acquisition vs. Retention: How to Balance Both for Sustainable App Growth

Struggling to grow your app? Discover why balancing user acquisition and retention is the key to sustainable app growth. Learn data-driven strategies to optimize CAC, LTV, and engagement at every stage—from early traction to scaling success. 🚀 #GrowthMarketing #AppSuccess

I’d be honest. Early in my career, I fell into the classic growth trap — thinking that if we just poured millions into acquiring users, we’d build a thriving app. And for a while, the numbers looked great. Installs were skyrocketing, CAC was manageable, and investor decks were filled with impressive graphs. But then reality hit — users churned just as fast (or even faster!) as we acquired them. The growth wasn’t real. It was a leaky bucket.

That’s when I realized that sustainable app growth isn’t about choosing between acquisition and retention—it’s about mastering both. You can drive downloads all day long, but if users don’t stick around, you’re just burning cash. On the flip side, obsessing over retention without feeding the top of the funnel can leave you stagnant.

In this article, I break down:
✅ Why focusing only on acquisition is a costly mistake
✅ How strong retention improves LTV and reduces CAC over time
✅ A data-driven approach to integrating both strategies based on your app’s growth stage

The Growth Trap: Why Focusing Only on User Acquisition is Costly

It’s easy to get caught up in the numbers game—pumping money into ads, watching downloads roll in, and feeling like your app is taking off. But here’s the reality: if users aren’t sticking around, you’re not growing—you’re just spending.

Many app companies fall into the “growth at all costs” mindset, prioritizing new user acquisition before ensuring that their product delivers long-term value. The result? High CAC with low retention, leading to unsustainable growth.

A prime example? The early days of many food delivery and ride-hailing apps. They threw massive incentives at users—free rides, discounted meals, referral bonuses. It worked for short-term installs, but when the discounts disappeared, so did the users. Without a solid retention strategy, these companies burned through capital with little to show for it.

User acquisition is important, but without strong retention, it’s like filling a bathtub with the drain open.

The Retention Advantage: Why Keeping Users is the Real Growth Lever

Acquiring users is just the first step—keeping them engaged is where the real growth happens.

✅ Improves Lifetime Value (LTV): The longer a user stays, the more revenue they generate.
✅ Lowers CAC Over Time: Higher LTV allows you to spend more efficiently on acquisition, improving return on investment.
✅ Drives Organic Growth: Engaged users naturally refer others, reducing reliance on paid marketing.

A simple framework for thinking about retention:

👉 Acquisition → Engagement → Habit Formation → Loyalty

Acquisition: Bring users in through targeted marketing.
Engagement: Deliver immediate value to keep them interested.
Habit Formation: Create experiences that make your app part of their daily routine.
Loyalty: Turn users into advocates who bring in more users.

Think about apps like Duolingo and TikTok—they don’t just attract users, they create behaviours that keep them coming back. Through gamification, push notifications, and personalized content, they build habits that drive long-term retention.

Finding the Right Balance: A Data-Driven Approach

So, how do you strike the right balance between acquisition and retention?

Data is your best guide. Here are the key metrics to monitor:

📊 CAC (Customer Acquisition Cost) – How much are you spending to acquire a user?

📊 LTV (Lifetime Value) – How much revenue does a user generate over their lifetime?

📊 Retention Rate – What percentage of users stay after X days?

📊 Churn Rate – How quickly are users dropping off?

📊 DAU/MAU (Daily/Monthly Active Users) – How engaged is your user base?

Your strategy should shift based on where your app is in its growth journey:

🚀 Early-Stage Apps – Use acquisition to test product-market fit. The goal is to validate demand quickly and iterate based on user feedback.

📈 Scaling Apps – Once you have a commercially viable product, shift focus to scaling acquisition while building core retention mechanisms (onboarding, push notifications, loyalty programs). The goal is to improve engagement and reduce churn.

🏆 Mature Apps – Growth becomes more about sustainable expansion. This is where upsells, community building, and referrals take center stage. The goal is to turn your users into your biggest advocates.

Final Thoughts

At the end of the day, real growth isn’t about choosing between acquisition and retention—it’s about making them work together. You can’t just fuel the fire with new users if the bucket is leaking, and you can’t focus only on retention without a steady stream of fresh users coming in. The most successful apps master the balance, using data to fine-tune when to push for scale and when to double down on keeping users engaged.

So, where does your app stand today? Are you struggling to acquire users, or is retention the real challenge? Drop a comment—I’d love to hear your thoughts and swap insights! 🚀

Digital Marketers: 7 Skills to Have in 2023

Recently with a little more time on my hands, I was curious to find out what companies/recruiters are looking for in Digital Marketers. But going through the many job descriptions on LinkedIn, it seemed to be a mammoth of a task, an especially menial one.

So, I decided instead to use some simple text analytics to mine out the keywords used in these job descriptions. First, using “digital marketing” as a keyword on LinkedIn, I took 30 job descriptions as the raw data. After that, I used a text mining package on R to analyse it for keyword frequency and associations.

Here’s what I found out.

Taking together the keyword frequencies and associations, provided me with a list of skills I believe would be important for Digital Marketers to have now.

1. Teamwork and Team Management

While Digital Marketing may oftentimes be thought of as an individual contributor, this is hardly the case. To run an effective digital marketing campaign, multiple cross-functional teams need to work hand-in-hand.

I will say the critical teams here would be the Performance Marketing, Creative, Data and Product Teams. Effective digital campaigns require these four teams to work together to produce data-driven potent ads that are successful in driving users to convert in the product conversion funnel.

As such, a Digital Marketer in 2023 needs to be able to work well with cross-functional teams, and/or be able to manage such teams.

2. Media Campaigns

Needless to say as digital marketers, we need to have the right technical skills to run media campaigns. However, I will go a step further here to highlight two points – the breadth of media campaigns and hands-on experience.

As we move towards a world powered by artificial intelligence (AI), Digital Marketers need to be more than single ad platform specialists. Being able to understand and manage multiple campaigns across different ad platforms will be vital.

In addition, with a looming recession, companies may be forced to tighten their resources and thus more Digital Marketers will be expected to have hands-on experience in managing the campaigns.

3. Drive Customer Growth

A huge part of what Digital Marketers do is to drive user acquisition. However, it is important to note that growing the customer base does not stop at the top of the funnel. It goes way deeper than that.

Digital Marketers need to be able to bring in quality users who will end up as valuable customers. This means focusing on bringing in relevant users, and working closely with Data and Product teams to retain customers.

4. Business Strategy

With increased help from AI, Digital Marketers need to move beyond technical expertise and towards other skill sets such as strategic thinking, creativity and problem-solving.

At the end of the day, digital marketing needs to help the company achieve its business goals. The more strategic Digital Marketers are, the better position they will be in to formulate strategies and tactics to bring success to their company.

At this point, an astute reader might be saying “Hey Mervyn, there are only 4 skills here. What happened to the other 3?”. To that, my answer is that the remaining three are from a book I have read recently – Think Again by Adam Grant.

5. Think Like a Scientist

To level up as Digital Marketers, we need to develop the habit of thinking again. Instead of simply forming opinions based on experience, come up with hypotheses, test them with data and arrive at your conclusions.

When building up our skill set to be more strategic, we Digital Marketers should approach business strategies as experiments.

6. Abandon Best Practices

More often than not, we Digital Marketers resort or fall back to what we think are ‘best practices’. However, in doing so, we are preventing ourselves from further improving our current routines.

What we need to do is to focus not just on results but also on the process. A bad process with a good outcome is luck, and a good process with a bad outcome might be a smart experiment. We need to adopt process accountability and continually pursue better practices.

7. Make Time to Think Again

Last but not least, we need to make time to think again. The world of Digital Marketing and Technology is ever-changing, and thus it is imperative that we set aside time for us to rethink and learn.

Take the time to assess how much you are learning, or how much closer are you moving towards your goals. All this will help you decide on your next steps, your next experiment or your next campaign.

Ultimately, we are rapidly moving towards a world filled with artificial intelligence and automation. Digital Marketers of today need to evolve as well to ensure that we stay relevant and continue to contribute substantially to our companies.

Are you up for the change?