Definition
ARPU is average revenue per user, typically used in consumer or seat-based products.
Why it matters
ARPU helps you track monetization efficiency. It differs from ARPA (per account) and can shift with pricing or usage.
Pricing implications
If ARPU is flat while usage grows, pricing may not be capturing value. Use ARPU trends to adjust tiers or add-ons.
Measurement tips
Use consistent time windows and exclude one-time fees for a stable ARPU trend.
Checklist
- Define whether ARPU includes usage revenue.
- Use a consistent time window (monthly or quarterly).
- Separate paid and free users when calculating ARPU.
- Track ARPU by plan or cohort.
- Compare ARPU before and after pricing changes.
- Avoid mixing ARPU with ARPA in reports.
- Normalize annual contracts to monthly revenue.
- Use ARPU trends to guide packaging decisions.