What Is ARPU (Average Revenue Per User)?

ARPU is a base-wide average, not a single-deal number. Where ACV describes one contract's annualized value, ARPU rolls up every active customer's revenue and divides by headcount, so it moves as the mix of the customer base shifts, new logos, expansions, downgrades, churn, rather than tracking any one sale.

The two metrics answer different questions and get confused often. ACV tells a rep or an appointment-setting vendor what a specific deal in the pipeline is worth. ARPU tells a founder or investor what the business's average customer is worth once pricing tiers, discounts, and usage-based add-ons have all played out across the live base. A company can have a high headline ACV on enterprise deals and a much lower blended ARPU if most of its actual customer count sits on cheaper self-serve tiers.

For outbound targeting, ARPU by segment is a useful sanity check on where pay-per-meeting economics actually work. A segment with a low ARPU and a long sales cycle is a poor fit for demo-buying in general, since the revenue captured per closed deal may not clear the cost of the meetings it took to get there.