Average Revenue Per Account (ARPA)
Average Revenue Per Account (ARPA) is total MRR divided by the number of active accounts. It tells you how much the typical customer pays and serves as a proxy for pricing health, customer segment mix, and expansion effectiveness.
Why Average Revenue Per Account (ARPA) Matters for SaaS Companies
Rising ARPA means your pricing is working — customers are finding more value and paying for it. Declining ARPA signals you are either attracting lower-value customers or failing to expand existing ones. For Seed to Series B companies, ARPA directly impacts LTV, payback period, and the sales model you can afford.
Formula
ARPA = Total MRR / Number of Active Accounts
Benchmark
Varies dramatically by segment. SMB SaaS: $50-500/mo. Mid-market: $500-5,000/mo. Enterprise: $5,000+/mo.
Tools for Measurement
An Operator's Take
ARPA is one of the first things I check because it tells me about pricing power. If ARPA is flat or declining while customer count grows, you are adding customers at the bottom of your pricing ladder — which means your acquisition is attracting a different (usually lower-value) customer profile than your product was built for. At one engagement, ARPA had dropped 30% over 6 months. The founder thought growth was going well because MRR was up. But they were filling the bucket with customers who paid less, churned more, and cost the same to support. We restructured the pricing page to steer prospects toward higher-value plans and ARPA recovered within a quarter.
Common Mistakes
What I see go wrong at Seed to Series B companies.
Tracking ARPA without segmenting by plan tier or customer type. Blended ARPA hides whether your pricing is working for each segment.
Not tracking ARPA trends over time. A 5% quarterly decline compounds fast and signals a pricing or mix problem.
Confusing ARPA (per account) with ARPU (per user). In seat-based pricing, one account might have many users. Track both if relevant.
What to Do This Week
Concrete steps you can take right now.
Calculate ARPA for each of the last 6 months. Is it trending up, flat, or down?
Segment ARPA by acquisition channel. If certain channels produce lower-ARPA customers, evaluate whether those channels are worth the investment.
If ARPA is declining, audit your pricing page: are prospects self-selecting into lower tiers? Consider pricing restructuring.
Related Resources
Frequently Asked Questions
What is the difference between ARPA and ARPU?
ARPA (Average Revenue Per Account) divides MRR by accounts. ARPU (Average Revenue Per User) divides by individual users. For seat-based products, one account might have 50 users — ARPA would be $500/mo while ARPU is $10/mo. ARPA is more common in B2B SaaS reporting.
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