ARPU: Definition, Meaning & Guide for Indian Businesses

Average Revenue Per User (ARPU) is monthly revenue divided by active customers. The key SaaS metric for understanding pricing power.

What is ARPU?

ARPU = monthly recurring revenue ÷ active customers. For Indian SMB SaaS at ₹1,000/month, ARPU starts ₹1,000 and grows with seat expansion, add-ons, plan upgrades. Track separately by cohort (signup month) and by tier. Growing ARPU = healthy pricing power. Falling ARPU = either competition or customer downgrades. Increase ARPU by: bundling add-ons, annual plans (typically +15-20%), usage-based pricing for power users.