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Average Revenue Per Customer (ARPC)


What is Average Revenue Per Customer?

Average Revenue Per Customer (ARPC) measures the average revenue generated per customer within a specific time frame.

How is Average Revenue Per Customer (ARPC) used?

This metric provides insights into the monetisation of individual customers and helps evaluate the effectiveness of pricing strategies. It's particularly useful for assessing Average Lifetime Value (LTV), monitoring market receptiveness, identifying high-value customer segments, and refining pricing models.

How to calculate Average Revenue Per Customer (ARPC)

Total Revenue / Number of Customers

To calculate ARPC, divide your total revenue by the number of customers over a specific time period.

Best Practices

To increase ARPC, focus on driving up-sells and cross-sells; use customer data to make personalised upgrade recommendations that align with their interests and needs. Experiment with tiered pricing models to maximise value extraction from customers. Also, implement loyalty programs that reward repeat business. If you are unsure about price-setting, common advice is to increase prices until customers complain but they are still willing to pay.

Common Misconceptions

A misconception is that increasing ARPC is solely the responsibility of the sales team. Enhancing ARPC is a cross-functional effort involving product, marketing, customer service, and sales. Another is that the best way to increase ARPC is by raising prices; in reality, other factors like retention, upselling, cross-selling, and the overall customer experience are equally important.




What are the main drivers of Average Revenue Per Customer (ARPC)?
  • Product pricing
  • Market demand
  • Up-sell/cross-sell effectiveness
How should I break down Average Revenue Per Customer (ARPC)?
  • Industry vertical
  • Geography
  • Company size
  • Product
  • Acquisition channel

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