What is ARPU / ARPA?
ARPU (Average Revenue Per User) and ARPA (Average Revenue Per Account) measure the average revenue generated per unit.
ARPU (Average Revenue Per User) and ARPA (Average Revenue Per Account) measure the average revenue generated per unit. ARPU tracks individual users; ARPA tracks company accounts. For B2B SaaS, ARPA is typically more relevant because one account may have many users.
ARPA = MRR ÷ Number of Active Accounts
ARPA trends reveal pricing power and product value. Increasing ARPA means customers are buying more (expansion) or you're moving upmarket. Decreasing ARPA may indicate competitive price pressure or moving downmarket.
ARPA segmentation is critical: break ARPA by customer segment (SMB, mid-market, enterprise), cohort (customers acquired this year vs. last year), and industry. This reveals which segments drive the most value.
Why It Matters
ARPA determines the viability of your go-to-market strategy. A $50/month ARPA requires product-led growth. A $5,000/month ARPA justifies dedicated account management. Misaligning GTM with ARPA wastes resources.
Frequently Asked Questions
What is the difference between ARPU and ARPA?
ARPU measures revenue per user. ARPA measures revenue per account. For B2B SaaS, ARPA is more relevant because one account (company) may have many users.
How do you increase ARPA?
Introduce higher-priced tiers, usage-based pricing, add-on products, seat-based pricing that grows with the customer, and strategic upselling.
Related Terms
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