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Avg. Unit price
How to apply
Calculate average unit price:
Average unit price = Total revenue / Total units sold
Track this monthly. Break it down by:
- Sales rep (who discounts more?)
- Customer segment (do enterprise customers pay more per unit?)
- Product tier (is premium actually priced higher?)
- Time period (is price eroding over time?)
To increase average unit price:
- Raise prices (most direct approach)
- Create premium tiers with higher per-unit pricing
- Reduce discounting through better sales training
- Improve value perception through marketing
- Sell to segments with higher willingness to pay
Why it matters
Average unit price directly impacts revenue and margins. A 10% increase in unit price at constant volume is a 10% revenue increase. That often flows straight to profit.
This metric also reveals discounting behaviour. Sales teams under pressure often discount to close deals. That shows up as declining average unit price. Making this metric visible creates accountability.
Pricing power is a competitive advantage. Companies that can charge more for their units have stronger positioning, better differentiation, and more perceived value.
Average unit price is the revenue you collect per unit sold. You work it out by dividing total revenue by the number of units sold over a period. If you sold 1,000 seats for 50,000 euros, your average unit price is 50 euros per seat.
Think of it as a read on your pricing power. A higher number means you capture more value per unit; a lower one usually means discounting, a drift toward smaller customers, or plain price erosion creeping in.
Say you're selling a project-management workspace built on ClickUp at 12 euros per seat. Land a few enterprise accounts on a volume discount at 8 euros, and your average unit price drops even though revenue climbs, because the mix shifted toward big, cheaper-per-seat deals. That is the number doing its job.
Or say you run outbound through Lemlist and most new logos sign on the entry tier. Your average unit price sags toward the floor price, a signal you're winning on price, not value. Push more deals onto a premium tier, say a support setup on Gorgias, and the average lifts.
Track it over time. A steady decline often means competitive pressure or a sales team leaning too hard on discounts to close.
Example 2: Discount discipline
A consultancy finds that average hourly rate has dropped from 150 euros to 130 euros over two years. Analysis shows increasing discounts on proposals. They implement a discount approval process requiring manager sign-off above 10%. Average hourly rate recovers to 145 euros.
Example 1: Price increase
A software company charges 45 euros per seat. They have not raised prices in three years. They increase to 55 euros per seat for new customers. Average unit price increases from 45 euros to 48 euros as new customers come in at the higher rate.