Average revenue per account (ARPA)
Also called: ARPA, ARPU, ARPC, Average revenue per user
Recurring revenue divided by the number of active accounts — the average size of a customer relationship.
ARPA = Total MRR ÷ Number of active accounts
ARPA is the average contract size across your active base. In B2B the unit is normally an account or a company; ARPU, the consumer equivalent, divides by individual users and is only meaningful where you sell to individuals.
The metric is most useful as a trend. Rising ARPA means you are either winning larger customers, expanding existing ones, or raising prices — three very different stories that ARPA alone cannot distinguish. Falling ARPA usually means a self-service tier is growing faster than the enterprise base, which may be exactly the strategy or may be a signal that upmarket motion has stalled.
Averages lie in B2B
Contract values in B2B SaaS are usually distributed with a long tail: a handful of large accounts and many small ones. The mean is dragged up by the tail, so a company where the median customer pays $500 per month can report ARPA of $2,400.
Report the median alongside the mean, or better, segment ARPA by tier or motion. A single blended ARPA across a PLG and an enterprise motion describes a customer that does not exist.
Where it feeds through
ARPA is an input to LTV and therefore to LTV:CAC. If ARPA is blended across segments, so are those, and the errors travel.
Stop calculating this in a spreadsheet
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