Average revenue per user (ARPU)

Definition of Average Revenue Per User (ARPU)

ARPU is a figure derived by dividing the total revenue of a company during a specific period by the total number of users during that period. It is used to measure the average revenue generated by each user, reflecting the consumption capacity of users and their value contribution to the company.

Use Cases

Operation Analysis

Companies can evaluate the operation of their business by analyzing ARPU. If ARPU is on the rise, it means that the company is generating more revenue from users, which may be due to the fact that the paid features of the product are more popular or that users are consuming more frequently.

Market Segmentation

By calculating the ARPU of different segments, companies can better understand the value of each market. For example, a mobile game company can calculate the ARPU of paying players and free players separately, and develop different marketing strategies for different types of users.

Investment Assessment

For investors, ARPU is one of the important indicators to evaluate the profitability and development potential of enterprises. Higher ARPU usually means that the enterprise has stronger profitability and better ability to explore user value, thus making it more attractive for investment.

Relationship with ASO (App Store Optimization)

Optimization Direction Guidance

The goal of ASO is to improve the ranking and exposure of applications in the app store, attracting more users to download and use the application. ARPU can provide an optimization direction for ASO. For example, if you find that ARPU is low, it may be because the quality of the attracted users is not high. In the process of ASO, you need to adjust the keyword strategy and accurately target high-value user groups. By choosing keywords related to high-spending users, you can attract users with greater potential to pay, thereby increasing ARPU.

User Retention and Conversion

Good ASO can increase the number of downloads of an application, but only by keeping users using and paying can ARPU be increased. In the process of ASO, optimizing the display page, application description, screenshots and other content of the application can make users understand the value and functions of the application more clearly, thus improving user retention rate and payment conversion rate.

Competitive product analysis

By comparing the ARPU of your own app with that of your competitors, you can understand your competitiveness in the market. At the same time, by combining ASO to analyze the keyword strategy, app ranking and other situations of your competitors, find out the gap and optimize it. If the ARPU of your competitors is higher, it may be that they have more effective strategies in ASO. By learning and drawing lessons from them, you can improve your ASO work and improve the user quality and ARPU of your app.

Other factors affecting ARPU

Product Pricing

Reasonable product pricing strategies have a direct impact on ARPU. If the price is too high, it may lead to user loss; if the price is too low, it may not be able to fully tap into the consumption potential of users. Enterprises need to formulate appropriate pricing systems based on factors such as product costs, market demand and competition.

User Experience

A good user experience can increase user satisfaction and loyalty, thereby increasing the willingness and frequency of users to consume. For example, whether the interface design of the application is simple and beautiful, whether the operation is convenient, and whether the function is stable will affect the user's usage experience and payment decision.

Marketing activities

Effective marketing campaigns can stimulate user consumption and increase ARPU. For example, promotional methods such as time-limited discounts, full reduction activities, and virtual item giveaways can attract users to purchase paid products or services.

In summary, ARPU is a comprehensive indicator that not only reflects the profitability of a company but also closely related to business links such as ASO. Companies need to consider various factors comprehensively and continuously optimize products and marketing strategies to improve ARPU and achieve sustainable development.