How companies use ARPU and Retention Rate metrics

Introduction: Two Metrics - One Growth Language

ARPU (Average Revenue Per User) and Retention Rate - basic product health indicators. In conjunction, they answer two questions: "how much we earn on the player" and "how many players we save in time." At iGaming, this directly determines LTV, marketing payback and P&L sustainability.

Basic definitions and formulas

ARPU

ARPU_t = Net Revenue_t/Active Users_t, where Net Revenue is NGR minus payment commissions/affiliates/fraud (for management analytics, NGR is allowed with separate payment control).

Options:

ARPPU - for paying users.
ARPDAU/ARPMAU - by day/month base.
ARPU by vertical - separately casino/live/sports.

Retention Rate

Classic Retention_{Dk} = proportion of enrollment cohort users returning on day k.

Rolling Retention_{Dk} = proportion of cohort returning on any day ≥ k.

Week/Month Retention - hold on weekly/monthly windows.

Related metrics are Churn = 1 − Retention, Stickiness = DAU/MAU.

💡 In iGaming, use cohort calculations with cuts by traffic source, GEO, brand, vertical and payment method.

Why ARPU and Retention should be counted by cohort

Different channels and GEO give different "quality" of the audience and payment conversion.

Bonus promotions temporarily "inflate" ARPU - only a cohort view shows whether the effect holds.

Regulatory events (limits, taxes) change retention - cohorts fix the point of change.

How these metrics relate to LTV and ROI

Simplified for horizon T:

LTV_T ≈ Σ_{d=1..T} [Retention_d × ARPU_d] / (1 + r)^{d/30}
ROI_T = (LTV_T − CAC) / CAC

Hence the rule of thumb: LTV growth is possible through an increase in Retention (curve lives longer) and/or ARPU (more value per unit of time).

Where and how to use ARPU and Retention

1) Product and monetization

Onboarding tuning: compare Retention D1/D3/D7 according to onboarding versions, see the impact on the ARPU of the first 72 hours.

Bonus Policy: Analyze how the size/type of bonus affects Retention D7/D30 and ARPU after the bonus "burns out."

Content mix: Live share growth can lift ARPU, but sometimes "eats up" Retention if UX and limits are not adapted.

Metagames/Missions: Missions, battle passes, tournaments often elevate Rolling Retention and ARPPU at the mid-core segment.

2) Marketing and cost of traffic

Optimization of procurement: turn off sources with low Retention D7 and ARPU_30; raise rates where LTV_180/CAC is rising.

Creatives: A/B tests of creatives → quick signal on Retention D1/D3; low- ARPU_7 "clickbait" rejection.

Reactivation: for "dormant" use personal offers; the success metric is uplift Retention_{re-7} and ARPU_{30} reactivated.

3) Payments and finance

Approval/Cashout: Improving approval and payment time increases Retention (trust) and ARPU (more often deposits).

Bonus microeconomics: By reducing bonus intensity, make sure that the ARPU does not fall faster than the margin grows. The solution is targeted missions instead of flat bonuses.

Financial planning: ARPU and Retention underpin NGR and earnings projections (cohort models).

4) Responsible Gaming (RG)

Correct limits and early triggers reduce risk, sometimes reducing short-term ARPU slightly, but increasing lifespan and reducing churn → above "quality" LTV.

Sections and segmentation: minimum required set

Traffic Source × Campaign

GEO × Payment Method (APM)
Brand × vertical (casino/live/sports)
Device/OS
Cohort by month of enrollment
Behavioral segment: light/core/VIP (by VIP probability, not just turnover)

Threshold benchmarks (averaged for online casinos; adjust for GEO/vertical)

Retention D1: 28-40% (organics closer to the upper limit)

Retention D7: 12–20%

Retention D30: 5–12%

ARPDAU (mass): $0. 8–$2. 5; ARPPU (monthly): $70–$220

Stickiness (DAU/MAU): 18–30%

If Retention is low, improve traffic quality and UX; if ARPU is low - work with payments, promotional mechanics and content mix.

Example: what to do if ARPU grows and Retention falls

Symptom: aggressive promos led to an increase in ARPU_7, but Retention D30 sank.

Diagnosis: Channel/game cohorts show flow into highly volatile slots and an increase in payment failures due to KYC brakes.

Actions:

1. Rebuild the start directory under mid-volatility.

2. Enter tiered-KYC, speed up cashout for low-risk.

3. Replace some of the flat bonuses with missions/loyalty.

Expected: Retention D30 ↑ by 2-4 pp, ARPU_30 − slightly; LTV_180 ↑ due to the area under the retention curve.

Dashboards "mandatory minimum"

1. Cohort Revenue View

LTV_30/90/180 = Σ (Retention × ARPU); ARPU_7/30; Payback; CAC.

Sections: channel/GEO/vertical/device.

2. Retention Ladder

D1/D3/D7/D14/D30/rolling_180; Stickiness DAU/MAU; survival curve.

3. ARPU & Payments Health

ARPU/ARPPU × approval/MDR/cashout; contribution of payments to ARPU.

4. Promo Impact

ARPU and Retention before/after promo; incrementality (geo-holdout/PSA control).

5. VIP Panel

Probability VIP, ARPPU, Retention_90 VIP vs non-VIP; cost of personal offers.

Experiments and causality

A/B and geo-holdouts: Evaluate the incremental effect of promo on Retention and ARPU.

Causal uplift models: Target offers to those expected to grow Retention without toxic cost growth.

Personalization: rank the showcase by return probability and expected ARPU; comply with RG policies.

Common mistakes

1. Read ARPU on MAU, mixing new and "old" - the signal is lost. Solution: cohorts and ARPU by player age.

2. Ignore payment fees and taxes - ARPU "on paper" is higher than real.

3. Chase ARPU by sacrificing Retention - short-term growth, long-term LTV decline.

4. Look only at last-click - assistant channels are underfunded.

5. Do not separate re-activations and new registrations - ARPU/Retention distortion.

6. Do not take into account RG/limits - short-term ARPU is growing, risk/fines - too.

Practical ARPU and Retention enhancement playbooks

Promote Retention

Simplify KYC (tiers, document preloading, transparent statuses).

Missions/progression, personal collections of content (mid-volatility, localization).

Quick cashout and support feedback (<15 min before response).

Increase ARPU

Package offers (bundle bonuses + live events), personal limits.

Casino ↔ live ↔ sports.

Optimization of approval/MDR (PSP orchestration, backup routes).

Do together (LTV effect)

Bonus savings through → Retention missions do not fall, ARPU holds → LTV grows.

Acceleration of payments → Retention ↑, frequency of deposits ↑ → ARPU and LTV grow simultaneously.

Mini Effect Calculator (simplified)

Было: Retention D30 = 8%, ARPU_30 = $42 → LTV_30 ≈ $3. 36 conventional units of "area" (approximately Retention × ARPU in normalization).

Became: Retention D30 = 10% (+2 items), ARPU_30 = $41 (− $1) → LTV_30 ≈ $4. 10 → + 22% to early LTV with almost unchanged economy.

Implementation checklist

Unified Data Schema: Bets/Winnings → GGR → NGR → Net Revenue.
Cohort tables with D1...D180 and ARPU_7/30/90.
Sections: channel/GEO/vertical/device/AWS.
Retention/ARPU + Payments Health dashboards.
Geo-holdouts.
RG policies are built into targeting; toxic pattern monitoring.
SLA payments and support, alerts to the fall in approval/increase in pending.

ARPU and Retention are not just "two numbers," but the LTV operating language. Companies that consider them cohortingly, associate them with payments and check the causality of promotions, get steady growth: marketing pays off faster, the product holds longer, and profits grow predictably. Balance these metrics and you turn tactical improvements into long-term capitalization.