Monetization rate
Also called: Paying share
Monetization rate is the share of active customers who pay anything in a period. Together with ARPPU it decomposes ARPU exactly, separating how many customers were converted from how much the converted ones spent.
How it is calculated
Monetization rate = Paying users / Active users
ARPU = Monetization rate x ARPPU. If ARPU moves, this identity says which half moved.
Why it matters for ARPU
It is the first diagnostic to run when ARPU shifts, and it usually points at a different team than the one that gets blamed.
Related terms
ARPUARPU, average revenue per user, is total revenue in a period divided by the average number of active users in that period.ARPPUARPPU, average revenue per paying user, divides revenue only by users who paid in the period.Revenue per available customerRevenue per available customer spreads revenue across everyone reachable, including dormant and non-paying users, rather than only the active base.Cohort analysisCohort analysis groups customers by a shared starting characteristic, usually acquisition month, and follows each group over time.