Dictionary Entry


The average revenue per user is a key performance indicator in the context of unit economics. It's defined by the total revenue divided by the total number of users. It's not to be mixed up with the customer lifetime value. Whilst the CLV tells about the revenues of each individual customer beginning at the time of the signup until the termination of the contract (e.g. subscription fees), the average revenue per user is also including secondary revenue streams like referral fees of other platforms.

Also the ARPU is normally measured company-wide and offers a way to make certain timespans comparable (e.g. month-by-month development of ARPU). A positive development of the ARPU gives investors and shareholders great insights on the performance of the overall company.

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