Average Revenue Per User (ARPU)
What is Average Revenue Per User (ARPU)?
Average Revenue Per User (ARPU) measures the average amount of revenue generated by an individual user over a set timeframe. While similar to ARPA, it focuses on individual users rather than company-wide accounts, which is particularly relevant for seat-based pricing models.
Why It Matters
-
It provides insight into the revenue contribution of different user segments or pricing tiers.
-
Monitoring ARPU helps businesses evaluate the impact of pricing changes or new feature releases on individual spending.
-
It allows for more granular financial forecasting and unit economic analysis.
