Quick Answer (TL;DR)
Average Revenue Per Account (ARPA) measures average revenue per customer account. The formula is Total revenue / Number of accounts. Industry benchmarks: Varies by market. Track this metric when accounts have multiple users.
What Is Average Revenue Per Account (ARPA)?
Average revenue per customer account. This is one of the core metrics in the revenue metrics category and is essential for any product team serious about data-driven decision making.
Average Revenue Per Account (ARPA) connects product performance to business sustainability. Revenue metrics translate user behavior into financial outcomes, making them essential for board reporting, investor communication, and strategic planning.
Understanding average revenue per account (arpa) in context --- alongside related metrics --- gives you a more complete picture than tracking it in isolation. Use it as part of a balanced metrics dashboard.
The Formula
Total revenue / Number of accounts
How to Calculate It
If total revenue equals $500,000 and number of accounts equals 1,000:
Average Revenue Per Account (ARPA) = $500,000 / 1,000 = $500
Benchmark this result against the ranges in the next section.
Benchmarks
Varies by market
Benchmarks vary significantly by industry, company stage, business model, and customer segment. Use these ranges as starting points and calibrate to your own historical data over 2-3 quarters. Your trend matters more than any absolute number --- consistent improvement is the goal.
When to Track Average Revenue Per Account (ARPA)
When accounts have multiple users. Specifically, prioritize this metric when:
You are building or reviewing your metrics dashboard and need revenue indicators
Leadership or investors ask about revenue performance
You suspect a change in product, pricing, or go-to-market strategy has affected this area
You are running experiments that could impact average revenue per account (arpa)
You need a quantitative baseline before making a strategic decision
How to Improve
Grow the numerator. Increase total revenue through pricing optimization, upselling, or expanding to new segments.
Optimize pricing regularly. Most companies set pricing once and forget it. Review pricing quarterly, test willingness to pay, and ensure your pricing reflects the value you deliver.
Focus on expansion revenue. Growing revenue from existing customers is 5-7x cheaper than acquiring new ones. Build upgrade paths, usage-based pricing tiers, and cross-sell opportunities.
Reduce involuntary churn. Failed payments account for 20-40% of SaaS churn. Implement dunning flows, card update reminders, and retry logic to recover revenue automatically.
Common Pitfalls
Not normalizing for time period. Revenue metrics must be calculated over consistent time periods. Comparing a 28-day month to a 31-day month without normalization creates misleading trends.
Ignoring revenue quality. Not all revenue is equal. Revenue from customers likely to churn, deeply discounted deals, or one-time contracts should be weighted differently than high-quality recurring revenue.
Measuring without acting. Tracking this metric is only valuable if you have a process for reviewing it regularly and a playbook for responding when it moves outside acceptable ranges.
Related Metrics
Average Revenue Per User (ARPU) --- average revenue generated per active user
Lifetime Value (LTV) --- total revenue expected from a customer over their lifetime
Annual Recurring Revenue (ARR) --- annualized recurring revenue
LTV:CAC Ratio --- relationship between customer value and acquisition cost
Product Metrics Cheat Sheet --- complete reference of 100+ metrics