ARPU as a general KPI contains certain aspects inherent to this revenue model, such as the standard rate charged for the service, discounts, promotions and, of course, losses—if any—that occur during collections.
In a world where business and digital marketing dominate commercial transactions through e-commerce and online businesses, ARPU has become very important in determining whether an organization is at a break-even point.
Its importance increases especially when we consider bermuda email list 40999 contact leads that SaaS companies must compete for every penny within their niche.
Read to the end and discover everything you need to know about this metric!
What is ARPU?
As we already mentioned, the Average Revenue per User is a metric whose main objective is to provide the correct information to analyze the growth or decline of an organization in terms of the amount of money it is able to obtain for each client it has.
In other words, it is an exact calculation that shows the income received from each user for the marketing of products and services. An aspect that allows obtaining a clear perspective on the customer database and the return on investment or ROI of the company's products.
It differs from other KPIs, such as customer acquisition cost , in that it is the monetary figure obtained with each existing customer and not the cost incurred to attract a new consumer.
The importance of ARPU in business
Through this metric, managers and executives can quickly identify changes in market behavior or trends that have been adopted over a given period.
It also makes it possible to view the prices that best match the tastes and possibilities of customers, as well as discover those products and services that spend the longest time without rotation.
Its importance lies in the fact that a manager will be able to plan in the short and long term, elements such as monthly income and establish the ideal marketing strategies to increase the money supply or, instead, lower prices to attract more users to their products or services.
Having said all this, it is time to talk about those factors that ARPU can provide to a company and that are truly valuable.
