Bruno Pedro's public notes

How an API can increase the retention rate

Why is retention rate so important and how can an API help increase it?

While reviewing the Customer Lifetime Value (CLTV) concept and its relationship with APIs, I returned to an article I wrote in 2014.

In the article, I explore how APIs can increase your revenue. I also explain what CLTV is and show that retention is the number one metric that affects it dramatically. While increasing your ARPU makes the CLTV grow linearly, the relationship between retention and CLTV is exponential (see the chart).

And having an API is a way to increase retention because it puts your product directly inside your users’ workflows. The more developers integrate your API with other products, the more frequently it will be used.