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How to Calculate Average Revenue per Customer (ARPC) for Your SaaS Business


How to calculate and analyze ARPC/ARPA

We previously covered a few key SaaS metrics that are crucial for every entrepreneur to keep track of — they can also be a bit complicated to calculate. Click any of the following you need a refresher or want to review best practices:


Here we explore Average Revenue per Customer (ARPC), or Average Revenue per Account (ARPA), which is a pretty self-explanatory metric, but worth breaking down!


What is ARPC?

As the name suggests, ARPC or ARPA is the average revenue generated from each customer account per month (or per year). Sometimes the metric is further broken down by customer segment or product type, such as the ARPC for enterprise level customers, or the ARPC for a particular product.


Why ARPC is important

Knowing the ARPC for different products can help SaaS businesses to identify their most valuable offerings. For example, assume your company offers a mix of products and services with the following ARPCs:

Product/Service

ARPC

​Product A

​$50/month

​Product B

​$200/month

​Service

​$150 one-time fee

Here's what ARPC tells us

Product B is definitely the cash cow in terms of revenue generation. Assuming products A and B have similar expenses, your company should focus on growing the customer base of Product B.


In addition, knowing the ARPC of different products and services helps SaaS businesses identify upsell opportunities.


Expanding on the previous example, we added a pricing column for the different products and services showing the lowest and highest price for each product.

​Product/Service

​ARPC

​Pricing

​Upsell Opportunity

​Product A

​$50/month