What is the Average Revenue Per Subscriber (ARPS) Metric?
The Average Revenue Per Subscriber (ARPS) metric represents the average recurring revenue generated per active paid subscriber. It is calculated by dividing the Monthly Recurring Revenue (MRR) by the total count of active paid subscribers. This metric provides insight into the average value of each paying subscriber.
This metric is available for the clients who have access to ChurnIQ. You can find it in the Cleeng Dashboard under ChurnIQ.
How is it Calculated?
The formula for calculating ARPS is:
ARPS = Total MRR / Active Paid Subscribers
- MRR: Monthly Recurring Revenue, representing the total recurring revenue from active subscriptions.
- Active Paid Subscribers: The total count of subscribers with active paid subscriptions.
How to Use the ARPS Metric in a Subscription Business
The ARPS metric is crucial for understanding the revenue generated by your paying subscriber base. You can use it to:
- Assess Subscriber Value: Monitor ARPS to understand the average revenue generated by each paying subscriber.
- Evaluate Pricing Strategies: Analyze ARPS to determine the impact of pricing changes or subscription plan adjustments on revenue per subscriber.
- Identify High-Value Segments: Compare ARPS across different subscriber segments to identify high-value customer groups.
FAQs
How does ARPS differ from Average Transaction Value (ATV)?
ARPS focuses on the average recurring revenue per subscriber, while ATV measures the average value of each individual transaction. They provide different insights into revenue generation.