Average Revenue Per Account (ARPA)
Date created: Oct 12, 2022 • Last updated: Oct 12, 2022
What is Average Revenue Per Account?
Average Revenue Per Account (ARPA) is the average revenue generated per account per year or month. It is used as an indication of revenue generation capability and the ability to meet targets.
Average Revenue Per Account Formula
How to calculate Average Revenue Per Account
Consider a company has 1000 accounts and is generating $100,000 in revenue per month. Average Revenue per Account would be, ARPA = $100,000 / 1000 = $100 per account per month
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How to visualize Average Revenue Per Account?
Use a summary chart to visualize your Average Revenue Per Account data and compare the current value to a previous time period.
Average Revenue Per Account visualization example
Summary Chart
Average Revenue Per Account
Chart
Measuring Average Revenue Per AccountMore about Average Revenue Per Account
The ARPA trend over time gives a perspective on the value of the company's products and services. Most industries are looking for an increase in the ARPA over time. Changes in ARPA can be a reflection of changes in prices, expansion or contraction within accounts, or even changes in initial purchases.
Comparing ARPA trends for different segments of accounts may also provide useful insights. For example, if you are focused on increasing overall revenue and want to increase the initial purchase value for new accounts, watching the trend of ARPA for new accounts gives great insight into progress towards your goal. Alternatively, if you have multiple product lines, segmenting by product line will help identify high or low revenue generating products.
If you have a freemium model, the free accounts are typically not included in the calculation.
Metric Toolkit
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