ARPU = Total Revenue / Number of Active Users. For example: $150,000 monthly revenue / 50,000 MAU = $3.00 ARPU. You can also calculate ARPPU (Average Revenue Per Paying User) by dividing revenue only by paying users.
It varies wildly by category. Consumer subscription apps typically see monthly ARPU between $0.50 and $5.00. Health and fitness apps average around $1.50-$3.00, while productivity tools can hit $4.00-$8.00. The key is tracking your ARPU trend over time, not comparing to other categories.
ARPU measures revenue per user over a fixed time period (like a month), while LTV estimates the total revenue a user will generate over their entire relationship with your app. Think of ARPU as a snapshot and LTV as the full movie.
Focus on three levers: increase your conversion rate from free to paid, raise your average selling price through better price anchoring and annual plan promotion, and reduce churn so paying users stay longer. Upselling power users to premium tiers is another high-impact move.
A method of product experimentation in which users are randomly split into two or more cohorts (e.g., Group A and Group B), with each group exposed to a different variation of a feature such as copy, design, or pricing. A primary success metric is established before the test begins, and the outcome is typically measured using frequentist statistics and confidence intervals to determine if one version outperforms the other — or if results are inconclusive.
A key stage in the customer lifecycle that occurs after acquisition. Activation is defined by a user completing a high-value action for the first time — such as starting a trial, making a purchase, or engaging with a core feature. The exact definition depends on the app’s monetization model and business goals.
A user who currently has an active, paid subscription. This excludes users in a grace period, trial, or lapsed state, and is typically the core population used when calculating MRR or churn rate.
The process of improving an app’s visibility in app store search results and browse sections (e.g., on Apple’s App Store or Google Play). ASO involves optimizing elements like the app name, description, keywords, icon, screenshots, and video preview to drive organic installs and improve conversion rates from page views to downloads.
Apple’s paid user acquisition channel that displays targeted ads at the top of App Store search results. ASA allows marketers to bid on keywords, define demographic and behavioral targeting, and optimize campaigns based on user value post-install, such as subscription conversion or trial start.
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