Formulas
ARPU = Revenue / All active users (MAU)
ARPPU = Revenue / Paying users
Example: revenue for the month $50,000, MAU = 50,000, paying users = 2,500.
– ARPU = 50,000 / 50,000 = $1.00
– ARPPU = 50,000 / 2,500 = $20.00
Using ARPU to assess personalization
ARPU is convenient for comparing cohorts: users who received a personalized experience versus a control group.
ARPU (with personalization) = $1.45
ARPU (without personalization) = $1.10
Uplift = +32%
Because ARPU already combines conversion and order value in a single number, it does not hide the trade-off that a conversion-only comparison can mask — a variation that converts more users at a lower basket size shows up as flat ARPU rather than a win.
ARPU by segment
Breaking ARPU down by audience segment exposes where the growth sits:
| Segment | Typical ARPU | Growth potential |
|---|---|---|
| New users | Low | Onboarding and the first purchase |
| Repeat (2–5 orders) | Medium | Increasing frequency |
| Loyal (6+ orders) | High | AOV, upsell |
| Dormant | Low or zero | Reactivation |
Personalization works differently in each segment: for new users it lowers the barrier to the first purchase, for loyal ones it raises AOV.