ARPU stands for the average revenue per user. One of the most frequently used terms in startup businesses, it’s the average amount of money a customer shells out on your network during an entire billing period. So what is a good ARPU? It completely depends upon what you’re selling and how much you’re spending to acquire customers. A low ARPU can be a sign of poor product fit or poor user experience. To avoid these issues, here are five easy hacks to increase ARPU.
1. Compensate for Churn by Increasing Revenue From Existing Users
To avoid churn, the best thing to do is to retain customers. You can do that by providing them with a great service or experience and then asking for reviews after the fact. Don’t just stop at reviews, though — you can take things a step further by offering a discount code for their next purchase or by providing online or in-store support if something goes wrong.
2. Do Not Offer a Free Service — The Cost of Acquiring a New Customer Is Too High
If you’re offering a free service, you’re just building an audience. An audience is valuable, but you need to sell something to them if you want them to keep using your service. Most businesses, however, make the mistake of not doing this or not doing this well. And this is where your competition gets ahead of you. Just make a free sample of your product available, and link to a page where people can sign up to buy it.
3. Promote Your Product or Service to People Who Are Similar to Your Ideal Customer
The customer segmentation model divides customers into categories based on their behavior, demographics, and psychographics. To put it simply, this means that you can sort your customers into homogeneous groups based on what they do and how they might respond to your marketing campaign. Businesses must evaluate their clientele and find the most relevant segments for their business — from there. You can also create a marketing campaign that will reach a broad audience of potential clients.
4. Make Sure That You’re Not Losing Money on Your Users by Offering Refunds (Membership Cancellations, Hefty Last-Minute Discounts)
Have you ever bought a product only to realize the seller has posted misleading information about it? We all have. It’s an embarrassing experience. To avoid this, make sure your refund policy is clear, detailed, and accessible. A refund policy is an important part of any online business because it can help you get your money back when you need it, but it also has other advantages. First off, it allows you to be more flexible about returns.
5. Augment Your Free Plan With Extra Features That Customers Can Purchase
Your free plan is incredibly helpful, but it’s not the be-all-end-all solution. While some customers may be willing to make do with your free plan, many others may want access to additional features, advanced customization options, or premium data management services. Offering these customers the option to purchase an upgrade will ensure that they never feel like they’re missing out on features that they need. Marketing platforms like AppsFlyer can help you measure and important metrics like ARPU and more.
And that’s a wrap for our blog post about increasing your ARPU. We hope you find it useful. Thank you for reading.