Average Revenue Per User (ARPU)

Average revenue per user, or ARPU, tells you how much revenue each customer generates on average over a set period, usually a month. You divide your total recurring revenue for that period by the number of active customers. Some businesses use ARPA, average revenue per account, when one account holds many users, but the idea is the same: revenue divided by the count of paying relationships.

ARPU is a quiet but powerful lever. Raising it through better pricing, packaging or expansion often grows the business faster and more cheaply than chasing more customers. For a lean founder it shapes nearly every other decision: a higher ARPU means each customer can support more spend on acquisition and service, which opens up channels and motions that a low ARPU would make unaffordable. Watching ARPU drift over time also reveals whether you are attracting more valuable customers or quietly sliding down-market into cheaper, harder-to-serve ones.