Average Revenue per User (ARPU)
What is Average Revenue per User (ARPU)?
This metric is also sometimes called the Average Revenue Per Visitor, or ARPV. It is the calculated average amount of currency a certain user brings to your business by purchasing goods or services.
How do you calculate ARPU?
The average revenue per user (ARPU) of financial service is computed by dividing the total revenue by the total number of unique users:
Average Revenue Per User = Total Revenue/Total Unique Users
If you have yearly revenue of $200,000 and you have 500 unique buyers, your Average Revenue Per unique visitor would be $200,000/500 or $400 per user.
Converting users to clients is significant for e-commerce and has a pronounced effect on revenue. However, conversion rates are not uniform among all types of visitors.
If your conversion optimization strategy is tailored toward a larger number of users, but with smaller order values like that could eventually raise your conversion rates and lower your total revenue.
Is there a way to Increase ARPU?
Retract your present offer. It is important to have a strategy that can help you increase revenue and attract more people at the same time. Customer segmentation and data driven decisions could eventually increase the ARPU of your business.