What is ARPA?
ARPA, average revenue per account, is the recurring revenue you earn from a typical customer in a period. ARPU is the same idea per user, which fits seat-based and product-led models. Both are MRR divided by a count.
ARPA is a lens on monetization. It tells you whether you are selling more to each customer over time, and it is a direct input to lifetime value.
The ARPA formula.
ARPA = total MRR divided by number of accounts. ARPU = total MRR divided by number of users. Use the same period for the revenue and the count.
Pick accounts or users deliberately. A team selling per seat watches ARPU; a team selling per company watches ARPA.
A worked example.
You have 100,000 dollars of MRR across 200 accounts. ARPA is 100,000 divided by 200, which is 500 dollars a month, or 6,000 dollars a year.
What is a good ARPA?
There is no universal number, because ARPA depends entirely on your price point and segment. A self-serve tool and an enterprise platform can both be healthy at very different ARPAs. What matters is the trend. Rising ARPA means expansion or a move upmarket; falling ARPA can mean discounting or a shift toward smaller accounts.
ARPA feeds lifetime value directly, so a higher ARPA at the same churn raises LTV and the budget you can spend to acquire.
How to grow your ARPA.
Raise prices, move upmarket, or expand existing accounts into more seats and modules. Expansion is usually the most durable, because it builds on customers who already see value.
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