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Average Revenue Per Account (ARPA) charts the change in the average monthly recurring revenue (MRR) of subscribers over time.
This metric is also known as Average Revenue Per User (ARPU) or Average Revenue Per Customer (ARPC).
If you’re interested in analyzing the change in average initial price of new subscriptions, see Average Sale Price.
TL;DR
Average Revenue Per Account (ARPA) charts the change in your MRR divided by the number of subscribers. It gives you insight into the average monthly recurring revenue your business receives from a subscriber.
ARPU vs. LTV
There’s a bit of confusion when it comes to the difference between the Average Revenue per User and the Customer Lifetime Value (LTV). They’re not the same.
LTV tracks the total amount of money an average customer pays you before they churn. As such, it is a measure of how well you’re retaining customers. This can be a useful indication of whether your marketing department is doing a good job of targeting the best customers and how well your customer success team is doing.
ARPU is better suited to evaluate the performance of factors such as your pricing, your messaging, and the effectiveness of the channels you’re using to reach customers.
Chart Notes
- ChartMogul calculates ARPA using MRR, which comes from invoice line items and not transactions.
- A customer with an Active or Past due status is counted as a subscriber. Learn more about customer and subscription statuses.
- A customer with multiple subscriptions is counted as one subscriber.
Calculation
ChartMogul calculates Average Revenue Per Account as the total MRR in a given period divided by the number of subscribers in that period.
For example, you have five customers:
- Customers 1 and 2 pay $100 per month
- Customer 3 pays $300 per month
- Customers 4 and 5 pay $500 per month
The Average Revenue Per Account is $300 ($1,500 MRR / 5 customers).
Chart Data
See Chart Data.
Next Steps
- Read our blog post on The Full Guide to ARPU for SaaS Companies.
- Segment this chart by marketing channel, region, or training program completion to see which subscribers bring in the most revenue.
- Measure the number of Subscribers.
- Track the total expected subscription revenue over the lifetime of an average subscriber with Customer Lifetime Value.