David King, of Little Green Patch, and Siqi Chen, of Serious Business, have developed a wonderful presentation outlining their tactics for using metrics to improve game mechanics and monetization.

Metrics for Social Games

The most important slide of the entire deck, which is beautifully put together, is slide 4. It’s the equation that governs all businesses. And importantly, notes that the variables in this equation are dependent.

(lifetime user value – user acquisition cost) x scale = profitability

See slide 11 for a wonderful theoretical discussion of virality and the exponential implications for growth.