Data is very important for all companies, therefore, it is important to make use of the ARPU metric, which will help us to see how your growth is being and also that of other companies. If you still don’t know the ARPU concept very well, don’t miss this article. Next, we explain what ARPU is . It may interest you: Executive Master in Marketing, Sales and Digital Strategy Management INDEX OF CONTENTS What is ARPU? The acronym ARPU stands for Average Revenue Per Use, Belize Phone Number List  translated into Spanish would be Average Revenue Per User. This measure helps you analyze growth patterns and compare your success with the competition. Average revenue per user measures the amount of money a business expects to generate from an individual customer. It tells us how much money we are going to receive as a company from a client or average user of our services or products. The way to calculate it is dividing the total income by the total number of users. In short, ARPU allows you to have a clear idea, based on the data already known to the company, which products offer a lower ROI . In short, it facilitates decision-making and will help to adapt the business strategy according to each segment to increase commercial profitability. How to calculate ARPU Calculating the ARPU is very simple.

It is important to bear in mind that the number of users will affect the income. So an ARPU that is not very high is not a failure if you have many clients. To be able to calculate it we have to add the income and divide it by the number of users. To make a good ARPU calculation, we will not take into account users in a trial period or with temporary promotions. How to calculate total income To calculate the total income of your business , first you have to determine the amount of goods or services offered during a specific time, it is recommended in a month. Businesses that sell multiple products will want to see the total revenue for each product individually and then view the totals.

This allows you to see which products / services are generating more profit and more income. EXECUTIVE MASTER IN MARKETING, SALES AND DIGITAL STRATEGY MANAGEMENT Learn from the professionals Sign up! INFOGRAPHICS How to increase your sales with Inbound Marketing Download Why use ARPU Using ARPU has useful advantages for businesses. Here are 5 benefits :Comparison with competitors The best use of this metric is to compare ourselves to competitors or other verticals. ARPU is commonly used to analyze and compare subscription-based businesses.

If we know the users who have a competitor and the price of their services, we can calculate the ARPU to compare our company with the closest direct rivals. User segmentation for profitability analysis Most companies have segmentations. Looking at ARPU by segment can reveal interesting insights when combined with other metrics. Many companies find that lower-tier users generate the same amount of cost per user. For this reason, there are companies that have decided to make changes and have eliminated plans because they are not profitable. Know better acquisition channels Thanks to this metric we can analyze the users received in each conversion channel in order to check if any of them are standing out above the rest. In this way, we will be able to see if we are investing more in the highlighted channels and thus we will have possibilities to improve the final profit. Short-term income forecast If we know the value that each client has for the company based on the ARPU obtained, we will have to multiply this value by the number of clients expected in a given period of time. Facilitate decision making By offering information based on real company data, it allows us to know which are the most popular services and the price range that works best for us.

With all this information, it is possible to carry out a commercial strategy that enhances those commercial segments with the most potential for growth. ARPU variants: ARPPU, AMPU, ARPC ARPU has variants, we will explain them below: ARPPU: it is a version that is used for the calculation, discounts and promotions. AMPU: AMPU values ​​the profit margin left by each sale to the company. ARPC: is the same as ARPU with the only difference that it considers the customer who pays for the services instead of the number of users who use them. What did you think of this article? Comment and share! If you would like to learn more about other metrics, we encourage you to learn about the Executive Master in Marketing Management, Sales and Digital Strategy where you will learn from the best professionals.

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