Definition
ARPA (average revenue per account) or ARPU (per user) measures run-rate revenue per customer or user over a period.
Why it matters
ARPA drives LTV, payback, and segmentation decisions, and it reveals whether pricing aligns with value.
Pricing implications
Use ARPA by segment to set plan boundaries, minimums, and overages that match willingness to pay.
Measurement tips
Use a consistent time window, exclude one-time fees unless modeled separately, and separate expansion from new revenue.
Checklist
- Define account vs user clearly.
- Pick a standard time window (monthly or annual).
- Separate new, expansion, and churned revenue.
- Track ARPA by segment and plan.
- Compare ARPA to support and infra costs.
- Monitor ARPA drift after pricing changes.
- Document assumptions in models.
- Reconcile ARPA with billing data.