Customers and pricing
ARPU (average revenue per user)
Revenue divided by the average number of users.
Facts checked against sources onWhat does ARPU (average revenue per user) mean?
Average revenue per user is revenue in a period divided by the average number of users or customers in that period. Telecom and subscription businesses track it closely. Revenue = users × ARPU is a useful driver tree.
Where does it come up in case interview prep?
- Business models: who pays, and for whatLesson in How industries work: the toolkit
- Industry primers: retail, consumer goods, banking, telecomLesson in Business basics for non-business learners
- Who the customer is: segments by need and by valueLesson in Customers and growth: the economics of marketing
- How media, streaming, and gaming make moneyLesson in Media, streaming, gaming, and advertising
- Subscriber and content economicsLesson in Media, streaming, gaming, and advertising
- How internet platforms, marketplaces, and digital ads workLesson in Internet platforms, marketplaces, and digital advertising
- How telecom operators work and make moneyLesson in Telecom: mobile and fixed networks
- Games and betting region by region: who plays, who bets, and what is allowedLesson in Video games and betting: publishers, platforms, sportsbooks and lotteries
Related terms
- AOV (average order value)Revenue divided by the number of orders.
- CLV (customer lifetime value)The profit a customer is expected to bring over the whole relationship.
- TAM, SAM and SOMTotal market, the part you can serve, and the part you can win.
- Market shareOur sales as a share of total market sales.
- Relative market shareOur share divided by the largest competitor's share.
- Penetration rateThe share of potential customers who already use the product.
- Share of walletOur share of what one customer spends in the category.
- CAC (customer acquisition cost)What it costs, on average, to win one new customer.
Learn it in context
See ARPU (average revenue per user) at work in a lesson from How industries work: the toolkit, with checks as you go.
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