Definition
Average revenue per account (ARPA) is the average monthly recurring revenue each paying customer account brings in. It's a building block for LTV, CAC payback and pricing decisions.
Formula
ARPA = MRR ÷ number of paying customer accounts
Example
$18,000 MRR from 240 paying accounts: ARPA = $75.
ARPA vs ARPU
- ARPA is per account (a company, a household).
- ARPU is per user. If a team of five shares one account, ARPU is a fifth of ARPA.
B2B companies usually track ARPA; consumer products usually track ARPU.
Why it matters
Rising ARPA means customers are paying more over time, through upgrades, more seats or higher prices. It lifts LTV and shortens payback without needing more customers. Falling ARPA can mean you're attracting smaller customers or discounting too much.
Common mistakes
- Including free users in the count, which drags the average down.
- Comparing ARPA across periods without noticing a shift in customer mix.