Average Revenue Per Account (ARPA)¶

Definition¶

Average Revenue Per User (ARPU) measures the average monthly or yearly revenue generated from each customer account, typically used in subscription-based businesses.

Description¶

Average Revenue Per Account (ARPA) is a foundational SaaS metric that tracks how much revenue each customer account contributes over a defined period — often monthly or annually. It’s especially valuable in account-based models, where each account may have multiple users or licenses.

The relevance and interpretation of this metric shift depending on the model or product:

In SaaS, ARPA reflects how well your pricing model scales with account growth
In multi-user platforms, it shows revenue efficiency per account, not just per user
In freemium or usage-based pricing, it helps compare free-to-paid conversion effectiveness and upsell impact

A rising ARPA indicates successful expansion, upsells, or premium adoption. A falling ARPA may suggest downgrades, churn within accounts, or pricing misalignment. Segment by plan, vertical, or acquisition channel to find expansion-ready segments and pricing opportunities.

Average Revenue Per Account (ARPA) informs:

Strategic decisions, like adjusting pricing tiers or targeting high-value verticals
Tactical actions, such as targeting mid-tier accounts for expansion or add-on trials
Operational improvements, including mapping account growth journeys and CS touchpoints
Cross-functional alignment, by helping sales, marketing, product, and finance focus on growing account value, not just customer count

Key Drivers¶

These are the main factors that directly impact the metric. Understanding these lets you know what levers you can pull to improve the outcome

Account Expansion Activity: Accounts that add seats, users, features, or integrations grow ARPA over time. Flat usage = flat revenue.
Plan Mix Across Segments: If most accounts are on entry-tier plans, ARPA stays low. Upselling is key to lift.
Churn Impact: When higher-paying accounts churn, ARPA drops — even if new acquisition is strong.

Improvement Tactics & Quick Wins¶

Actionable ideas to optimize this KPI, from fast, low-effort wins to strategic initiatives that drive measurable impact.

If ARPA is flat, analyze top-performing accounts and identify patterns — what features or use cases correlate with growth?
Add tiered feature visibility within lower plans, showing what users are missing and what upgrading unlocks.
Run a usage-based upsell campaign to nudge expansion (e.g., “You’ve hit 80% of your user limit — time to scale up?”).
Refine pricing strategy to reward scale (e.g., volume-based pricing) while still encouraging plan upgrades.
Partner with CS to build proactive expansion plays based on account health and usage milestones.

Required Datapoints to calculate the metric
- Total Revenue from All Accounts: The total revenue generated in a given period.
- Number of Accounts: The total number of active customer accounts during that period.
Example to show how the metric is derived

A SaaS business calculates ARPA for Q1:
- Total Revenue: $1,000,000
- Number of Accounts: 500
- ARPA = $1,000,000 / 500 = $2,000 per account

Formula¶

Formula

\[ \mathrm{Average\ Revenue\ Per\ Account} = \frac{\mathrm{Total\ Revenue\ from\ All\ Accounts}}{\mathrm{Number\ of\ Accounts}} \]

Data Model Definition¶

How this KPI is structured in Cube.js, including its key measures, dimensions, and calculation logic for consistent reporting.

RevenueAccountsAverageRevenuePerAccount

cube('Revenue', {
  sql: `SELECT * FROM revenue`,
  measures: {
    totalRevenue: {
      sql: `total_revenue`,
      type: 'sum',
      title: 'Total Revenue',
      description: 'Total revenue generated from all accounts in a given period.'
    }
  },
  dimensions: {
    id: {
      sql: `id`,
      type: 'number',
      primaryKey: true
    },
    createdAt: {
      sql: `created_at`,
      type: 'time',
      title: 'Created At',
      description: 'The time when the revenue record was created.'
    }
  }
});

cube('Accounts', {
  sql: `SELECT * FROM accounts`,
  measures: {
    numberOfAccounts: {
      sql: `account_id`,
      type: 'countDistinct',
      title: 'Number of Accounts',
      description: 'The total number of active customer accounts during a given period.'
    }
  },
  dimensions: {
    accountId: {
      sql: `account_id`,
      type: 'number',
      primaryKey: true
    },
    createdAt: {
      sql: `created_at`,
      type: 'time',
      title: 'Created At',
      description: 'The time when the account was created.'
    }
  }
});

cube('AverageRevenuePerAccount', {
  sql: `SELECT * FROM revenue JOIN accounts ON revenue.account_id = accounts.account_id`,
  measures: {
    averageRevenuePerAccount: {
      sql: `${Revenue.totalRevenue} / NULLIF(${Accounts.numberOfAccounts}, 0)`,
      type: 'number',
      title: 'Average Revenue Per Account',
      description: 'Average Revenue Per User (ARPU) measures the average monthly or yearly revenue generated from each customer account.'
    }
  },
  joins: {
    Revenue: {
      relationship: 'belongsTo',
      sql: `${CUBE}.account_id = ${Revenue}.account_id`
    },
    Accounts: {
      relationship: 'belongsTo',
      sql: `${CUBE}.account_id = ${Accounts}.account_id`
    }
  },
  dimensions: {
    accountId: {
      sql: `account_id`,
      type: 'number',
      primaryKey: true
    },
    createdAt: {
      sql: `created_at`,
      type: 'time',
      title: 'Created At',
      description: 'The time when the record was created.'
    }
  }
});

Note: This is a reference implementation and should be used as a starting point. You’ll need to adapt it to match your own data model and schema

Positive & Negative Influences¶

Negative influences

Factors that drive the metric in an undesirable direction, often signaling risk or decline.
- Churn Impact: When higher-paying accounts churn, the Average Revenue Per Account decreases as the loss of these accounts reduces the overall revenue generated per account.
- Discounting: Frequent or high discounting can lower the Average Revenue Per Account as it reduces the revenue generated from each account.
- Customer Downgrades: When customers downgrade to lower-tier plans, the Average Revenue Per Account decreases as these plans generate less revenue per account.
- Market Saturation: In a saturated market, acquiring new high-value accounts becomes challenging, potentially leading to a decrease in the Average Revenue Per Account.
- Economic Downturn: During economic downturns, customers may reduce spending or opt for lower-cost plans, negatively impacting the Average Revenue Per Account.
Positive influences

Factors that push the metric in a favorable direction, supporting growth or improvement.
- Account Expansion Activity: Increased account expansion activities such as adding seats, users, features, or integrations lead to higher Average Revenue Per Account as these activities directly increase the revenue generated from each account.
- Plan Mix Across Segments: A higher proportion of accounts on premium or higher-tier plans results in increased Average Revenue Per Account, as these plans generate more revenue per account compared to entry-tier plans.
- Upselling: Effective upselling strategies that move customers to higher-value plans or add-ons increase the Average Revenue Per Account by generating more revenue from existing customers.
- Customer Engagement: Higher customer engagement often leads to increased usage and adoption of additional features, which can drive up the Average Revenue Per Account.
- Cross-Selling: Introducing and successfully selling complementary products or services to existing customers can increase the Average Revenue Per Account by increasing the total revenue generated from each account.

Involved Roles & Activities¶

Involved Roles

These roles are typically responsible for implementing or monitoring this KPI:

Finance
Product Marketing (PMM)
Revenue Operations
Sales Manager
Activities

Common initiatives or actions associated with this KPI:

Account Segmentation
Expansion Plays
Customer Tiering

Funnel Stage & Type¶

AAARRR Funnel Stage

This KPI is associated with the following stages in the AAARRR (Pirate Metrics) funnel:

Revenue
Type

This KPI is classified as a Lagging Indicator. It reflects the results of past actions or behaviors and is used to validate performance or assess the impact of previous strategies.

Supporting Leading & Lagging Metrics¶

Leading

These leading indicators influence this KPI and act as early signals that forecast future changes in this KPI.
- Product Qualified Leads: Product Qualified Leads (PQLs) are strong early indicators that an account is likely to convert to a paying customer or expand, which directly influences future Average Revenue Per Account (ARPA) by signaling higher value pipeline and expansion potential.
- Customer Loyalty: High customer loyalty predicts sustained or increased revenue per account, as loyal customers are less likely to churn, more likely to upgrade, and often have higher lifetime value, all contributing to higher ARPA.
- Activation Rate: A higher activation rate signals that more users are reaching meaningful product milestones, making them more likely to convert to paying customers or expand their usage, which increases average revenue per account downstream.
- Upsell Conversion Rates: High upsell conversion rates among existing customers are an early predictor of increased revenue per account, as more customers move to higher-value plans, boosting ARPA.
- Monthly Active Users: Growth in monthly active users (MAU) signals a growing engaged customer base, which creates more opportunities for monetization, expansion, and ultimately drives higher average revenue per account.
Lagging

These lagging indicators confirm, quantify, or amplify this KPI and help explain the broader business impact on this KPI after the fact.
- Expansion Revenue Growth Rate: Expansion Revenue Growth Rate quantifies the success of upselling and cross-selling initiatives, directly raising the Average Revenue Per Account by increasing the amount existing customers pay over time.
- Revenue Churn Rate: Revenue Churn Rate measures the percentage of recurring revenue lost due to churn or downgrades; a lower rate means more retained revenue per account, thus positively impacting ARPA.
- Customer Downgrade Rate: Customer Downgrade Rate reflects the proportion of customers who reduce their subscription value; a high downgrade rate lowers average revenue per account, making this a key explanatory KPI for ARPA declines.
- Net Revenue Retention: Net Revenue Retention captures the balance of expansions, contractions, and churn within the customer base; higher NRR signals more revenue retained and expanded, thus a higher ARPA.
- Contract Renewal Rate: Contract Renewal Rate indicates the percentage of customers retaining their contracts at existing or higher value, supporting stable or growing ARPA by preventing revenue loss from churn.