Average Revenue per User

Average revenue per user (ARPU) shows how much revenue an average user generates over a period, as a measure of the economic value of each user.

The denominator of this metric is the user, not the order; that is what separates it from average order value, whose denominator is the order and which describes basket size. ARPU describes the value of each person, so a store with small but frequent baskets can show a low average order value and a high ARPU. Three choices hide behind the figure: which user goes in the denominator (all users, active users, or paying users only, which turns it into ARPPU), which period, and gross or net revenue. Most importantly, the numerator means revenue comes from a source: in a store from recorded order values, in a subscription business from the billing system. An analytics tool always has the denominator but only has the numerator when transaction value was handed to it.