The average revenue per account (ARPA) is the average MRR or ARR generated per account. The metric is typically calculated on a monthly or yearly basis.
You’ll also commonly hear average revenue per account referred to as average revenue per user, average revenue per unit, or average revenue per customer.
Having an average revenue per account value allows the company to figure out which products or services are their cash cow. It also allows a SaaS company to look at the growth of a business through a per unit level.
If you’re acquiring customers across multiple channels, reviewing ARPA on a comparative channel basis can provide a great lens to decide which customers are higher value to your business.
To calculate ARPA you first need to define a specific amount of time, monthly, quarterly, yearly. ARPA equals monthly recurring revenue (MRR) divided by the total number of customers.
ARPA = MRR / Total # of Customers
Important note: If a customer has multiple accounts, they are consolidated and counted as one customer before ARPA is calculated.
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