Increasing the Average Revenue Per User (ARPU).

Nicki Friis

"On average, a repeat customer will spend 67% more than a new customer".

This post is about increasing the Average Revenue Per User (ARPU).

First off, for the basics: Your ARPU has to be higher than your Customer Acquisition Costs (CAC).

And by understanding your ARPU you have the power to understand:

1. How to profitably market your product/service.
2. What channels make sense in certain markets and for specific personas.
3. Your most profitable products, markets, customers, and more.

There are many ways to go about it, and I actually held a webinar about this topic once - where I showed a step by step
the process to figure out value metrics, pricing tiers, how to raise prices, and a lot more.

Anyway - here's the meat!

You can optimize your ARPU by finding the optimal pricing point for your different personas.

Most companies just guess or look to competitors when selecting their price range, but there are many smarter ways!

One way is doing Van Westendorp Price Sensitivity Meter Study - you gather qualitative data, by figuring out what your prospects and current customers feel like is worth paying for.

It's the smart approach to pricing.