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← Statistics glossary

ARPA (average revenue per account)

Also called: average revenue per account, average revenue per customer

MRR divided by the number of paying accounts (customers): how much an average customer pays per month. In B2B products one account often has several users, so ARPA is used instead of revenue per user.

ARPA (average revenue per account) is how much an average paying customer brings in each month: ARPA = MRR ÷ number of paying accounts. In a business-to-business product one account (a company, a shop, a clinic) may have several people logging in, so revenue per account says more than revenue per user (ARPU), which consumer apps usually track.

ARPA is the price you actually get, as opposed to the price on the pricing page. Annual discounts, legacy prices, volume deals and free months all pull it below the list price; upgrades and extra locations push it above. Watching ARPA over time shows whether the business is moving towards bigger or smaller customers and whether discounts are quietly eating the price.

ARPA feeds straight into the other unit-economics numbers: LTV ≈ ARPA × gross margin ÷ churn, and CAC payback ≈ CAC ÷ (ARPA × gross margin). A rising ARPA with stable churn is one of the cheapest ways to grow, because it needs no new customers at all.

Example

On 1 October of the first year GarageDesk's MRR is 34,000 UAH from 58 shops: ARPA = 34,000 / 58 ≈ 586 UAH, below the 600 UAH list price because 8 shops are on the yearly plan (500 UAH a month).

In October of year 2 MRR is 165,000 UAH from 240 shops: ARPA = 165,000 / 240 = 687.50 UAH. It went up because new shops now pay 750 UAH, even though the volume deal with a franchise (450 UAH per shop) pulls it down a little.

Common mistakes

  • Using the list price as ARPA. Discounts, annual plans and legacy prices make the real number lower.
  • Counting free or trial accounts. Divide by paying accounts only.
  • Mixing ARPA and ARPU. Per account and per user differ whenever accounts have several users.
  • Watching the average only. A few big accounts can lift ARPA while small ones churn.