Average Revenue Per User

Definition

The Average Revenue Per User shows how much revenue is generated on average by one account in a set time period.

Why use it

This metric shows an average customer’s worth to you in a set time period. In combination with a prediction of how long a customer will stay with your business it enabels you to calculate Customer Lifetime Value. It can be especially insightful if you track the ARPU for different customer acqusition channels. This gives you an understanding of how valuable different marketing channels are to you.

AliasAverage Revenue Per Account
AbbreviationARPU
UnitCurrency (Euro/Dollar/YEN/…)

 

Calculation

ARPU is calculated by dividing the Monthly Recurring Revenue by the total number of paying users.

MRR
÷ ∑ of paying users
ARPU

Example

A company has a MRR of 12.000 € and 220 paying customers.

12.000 €
÷ 220
54,55 €