Key ARPU metrics
With an array of customer monetization levers explored, from tactical pricing adjustments to loyalty program design, the need emerges to quantify the financial impact of these strategies. This requires a sharpened focus on ARPU, a pivotal metric that encapsulates the average recurring revenue contribution of each user.
Optimizing ARPU is imperative for PLG companies to drive sustainability through maximizing user lifetime value. By deeply analyzing ARPU performance, opportunities to boost wallet share come into focus.
ARPU quantifies the average recurring revenue generated per user across a defined cohort, typically measured monthly (ARPMAU) or annually (ARPAU). For SaaS businesses, ARPU closely correlates to subscription pricing levels on a per-user basis.
Several variants provide unique insights:
- Average revenue per annual user (ARPAU)
- Average revenue per monthly active user (ARPMAU)
- Average contract value (ACV)
- Average selling price...
