How To Calculate ARPU in NetSuite CRM | Arithmix

Calculating ARPU, or Average Revenue Per User, is an essential metric for any business looking to understand its revenue streams. ARPU is a measure of how much revenue a company generates per customer, on average. It is calculated by dividing the total revenue by the number of customers. In this article, we will discuss how to calculate ARPU and why it is valuable for businesses to do so.

What Is ARPU?

ARPU is a metric used to measure the average revenue generated per user or customer. It is calculated by dividing the total revenue generated by the number of customers. For example, if a company generates $100,000 in revenue and has 1,000 customers, the ARPU would be $100. ARPU is a valuable metric for businesses because it helps them understand how much revenue they are generating from each customer.

ARPU is particularly useful for businesses that offer subscription-based services or products. By calculating ARPU, businesses can determine the average revenue generated per customer over a specific period, such as a month or a year. This information can be used to make informed decisions about pricing, marketing, and customer retention strategies.

When Is It Valuable To Calculate ARPU?

Calculating ARPU is valuable for any business that wants to understand its revenue streams. However, it is particularly useful for businesses that offer subscription-based services or products. By calculating ARPU, businesses can determine the average revenue generated per customer over a specific period, such as a month or a year. This information can be used to make informed decisions about pricing, marketing, and customer retention strategies.

ARPU can also be used to compare the revenue generated by different customer segments. For example, a business may want to compare the ARPU of its high-value customers to its low-value customers. This information can be used to identify opportunities to increase revenue from low-value customers or to focus on retaining high-value customers.

ARPU is also valuable for businesses that are looking to grow their customer base. By understanding the average revenue generated per customer, businesses can determine how much they can afford to spend on customer acquisition. For example, if a business has an ARPU of $100 and wants to acquire 1,000 new customers, it can spend up to $100,000 on customer acquisition.

In conclusion, calculating ARPU is a valuable metric for any business that wants to understand its revenue streams. By understanding the average revenue generated per customer, businesses can make informed decisions about pricing, marketing, and customer retention strategies. ARPU is particularly useful for businesses that offer subscription-based services or products and for businesses that are looking to grow their customer base.

How Do You Calculate ARPU in NetSuite CRM

NetSuite CRM 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 CRM 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 CRM, 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 CRM 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 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.