GLOSSARY
ARPU (Average Revenue Per User)
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ARPU (Average Revenue Per User) is a key metric that calculates the average revenue generated by each user of a product or service over a specific period.
What is ARPU?
ARPU is a metric that helps startups measure the average revenue generated per user, providing insights into the financial performance of the business.
Why it Matters
ARPU is essential for evaluating the effectiveness of pricing strategies, customer segmentation, and overall revenue generation. It helps in making informed decisions to improve monetization strategies and profitability.
Examples
If your startup has 100 users and generates $5000 in revenue in a month, the ARPU would be $50 ($5000 revenue / 100 users).
- ARPPU (Average Revenue Per Paying User): Focuses on the average revenue generated per paying user, excluding non-paying users.
- LTV (Customer Lifetime Value): Measures the total revenue a business can expect from a single customer over the entire relationship.