ARPA vs ARPU

Definition

ARPU is revenue per active user; ARPA is revenue per paying account/customer. Choose the denominator that matches how you bill.

Example

If 200 accounts pay $1,000 total and 800 users are active, ARPA is $5 and ARPU is $1.25.

How to use it

• B2B SaaS often prefers ARPA (per account).
• Per-seat pricing can make ARPU more natural.
• Label the metric clearly so teams don't mix denominators.
• Use the same denominator across retention and LTV models.
• Track ARPA and ARPU together if you have mixed pricing models.

Common mistakes

• Switching between ARPA and ARPU in the same report.
• Using active users as a proxy for paying accounts.
• Mixing trial users into ARPU without labeling the definition.

Why this matters

This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.

Practical checklist

• Write a 1-line definition for "ARPA vs ARPU" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., ARPA Calculator) to sanity-check assumptions.
• Read the related guide (e.g., ARPA: how to calculate Average Revenue Per Account (formula + examples)) for context and common pitfalls.

Where to use this on MetricKit