Calculating ARPA (Average Revenue Per Account) is an important metric for any business that wants to understand its revenue streams. ARPA is a measure of the average amount of revenue generated by each customer or account over a specific period of time. In this article, we will explore what ARPA is, when it is valuable to calculate it, and how to calculate it in Sage CRM.
ARPA is a key performance indicator (KPI) that helps businesses understand how much revenue they are generating from each customer or account. It is calculated by dividing the total revenue generated over a specific period of time by the number of accounts or customers during that same period. For example, if a business generates $100,000 in revenue over a month and has 100 customers, the ARPA would be $1,000.
ARPA is a useful metric because it can help businesses identify trends in their revenue streams. For example, if the ARPA is decreasing over time, it may indicate that customers are spending less or that the business is losing customers. On the other hand, if the ARPA is increasing, it may indicate that customers are spending more or that the business is acquiring higher-value customers.
ARPA is valuable to calculate for any business that wants to understand its revenue streams and identify areas for growth. It is particularly useful for businesses that have a subscription-based model or recurring revenue streams, such as software-as-a-service (SaaS) companies or membership-based organizations.
By calculating ARPA, businesses can identify which customers or accounts are generating the most revenue and focus their efforts on retaining and growing those relationships. They can also identify which customers or accounts are not generating as much revenue and develop strategies to increase their spending or find new customers to replace them.
Calculating ARPA in Sage CRM is a straightforward process. First, you will need to gather the necessary data, including the total revenue generated over a specific period of time and the number of accounts or customers during that same period.
Once you have this data, you can calculate ARPA by dividing the total revenue by the number of accounts or customers. For example, if your business generated $100,000 in revenue over a month and had 100 customers, the ARPA would be $1,000.
It is important to note that ARPA should be calculated over a consistent period of time, such as a month or a quarter, in order to accurately track trends in revenue streams. It is also important to consider any outliers, such as one-time large purchases or customers who cancel their subscriptions mid-period, when calculating ARPA.
In conclusion, calculating ARPA is a valuable tool for any business that wants to understand its revenue streams and identify areas for growth. By following the steps outlined in this article, you can easily calculate ARPA in Sage CRM and use this metric to make informed business decisions.
Sage CRM itself isn’t naturally geared towards letting you calculate complex metrics like ARPA. As an alternative, teams typically use products like Arithmix to import data from Sage CRM and build out dashboards.
Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sage CRM, combine it with data from other systems, and create calculations like ARPA.
In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.
Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.
Calculating metrics like ARPA is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sage CRM data, and use it to create natural language formulas for metrics like ARPA.
Arithmix is designed to give you the power to build any calculations you want on top of your Sage CRM data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.