How To Calculate ARPU in Netsuite | Arithmix
Learn how to calculate Average Revenue Per User (ARPU) in Netsuite with our step-by-step guide. Increase your understanding of this important metric and improve your business decision-making.
Calculating ARPU (Average Revenue Per User) is an essential metric for any business that wants to understand its revenue generation per customer. It is a simple calculation that can provide valuable insights into the financial health of your business. In this article, we will discuss what ARPU is, when it is valuable to calculate ARPU, and how to calculate ARPU in Netsuite.
What Is ARPU?
ARPU is a metric that measures the average revenue generated per user or customer. It is calculated by dividing the total revenue generated by the number of users or customers. This metric is commonly used in subscription-based businesses, such as software as a service (SaaS) companies, where customers pay a recurring fee for access to a product or service.
ARPU is a valuable metric because it provides insights into the revenue generated by each customer. It can help businesses understand how much revenue they can expect to generate from each customer, which can be useful for forecasting and budgeting purposes. Additionally, ARPU can be used to identify trends in customer behavior, such as changes in spending patterns or the impact of new product offerings.
When Is It Valuable To Calculate ARPU?
ARPU is valuable to calculate in any business that generates revenue from customers. However, it is particularly useful in subscription-based businesses, where customers pay a recurring fee for access to a product or service. In these businesses, ARPU can help identify trends in customer behavior, such as changes in spending patterns or the impact of new product offerings.
ARPU can also be useful in businesses that offer multiple products or services. By calculating ARPU for each product or service, businesses can identify which offerings are generating the most revenue per customer. This information can be used to make strategic decisions about product development and marketing.
How to Calculate ARPU in Netsuite
To calculate ARPU in Netsuite, you will need to have access to your revenue data and customer data. Here are the steps to follow:
- Log in to your Netsuite account and navigate to the Reports tab.
- Select the Saved Searches option and choose the Customer Saved Search.
- Click on the Customize button and add the following fields: Customer Name, Total Sales, and Count of Sales Transactions.
- Save the search and navigate back to the Reports tab.
- Select the Saved Searches option and choose the Customer Saved Search you just created.
- Click on the Results tab to view the data.
- Divide the Total Sales by the Count of Sales Transactions to calculate the ARPU.
By following these steps, you can easily calculate ARPU in Netsuite. This metric can provide valuable insights into the financial health of your business and help you make strategic decisions about product development and marketing.
How Do You Calculate ARPU in Netsuite
Netsuite itself isn’t naturally geared towards letting you calculate complex metrics like ARPU. As an alternative, teams typically use products like Arithmix to import data from Netsuite and build out dashboards.
What is Arithmix?
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 Netsuite, combine it with data from other systems, and create calculations like ARPU.
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 ARPU in Arithmix
Calculating metrics like ARPU is simple in Arithmix. Once you've created your free account, you’ll be able to import your Netsuite data, and use it to create natural language formulas for metrics like ARPU.
Arithmix is designed to give you the power to build any calculations you want on top of your Netsuite 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.Use Arithmix free