Average Revenue Per Account, also known as Average Revenue Per User or Average Revenue Per Customer, is the revenue that is generated per account and is often computed monthly or annually. In some businesses, a customer may have multiple accounts; therefore, these customer-based metrics may differ from ARPA. Other terms that are sometimes used interchangeably with ARPA include ARPU and ARPC (ARPC).
It is helpful to narrow our focus to just the new clients who have made reservations this month. Create a trendline on a graph to get an idea of the typical pricing point that your new clients have gone with.
($) Total monthly recurring revenue / (#) total accounts = ($) Average Revenue Per Account (ARPA)
ARPA is determined by dividing monthly recurring revenue (MRR) by the total number of accounts. This can be easily converted to an annual metric by substituting MRR for annual recurring revenue (ARR).
This is especially important if you change your pricing significantly and want a more accurate average revenue per new account. In addition, it is useful to comprehend how your ARPA is changing based on the behaviour of existing accounts versus new accounts.
Using the same formula, average revenue per existing account is computed by dividing the MRR and number of accounts by the desired time period (perhaps last year).
The average revenue per new account is calculated using the same formula as above. Still, the MRR and number of accounts are restricted to whatever time period you define as 'new' (perhaps this year).
