Often referred to as ARPU, the average revenue per user is a driving metric and important KPI (Key Performance Indicator) when measuring the overall profitability of any iGaming operator or online business dealing with website user spend.
How do we measure ARPU?
ARPU is the total revenue per game or per account averaged across all users. It’s quite a simple calculation to make. In fact due to its simplicity, it is often brushed off as an unimportant metric. It isn’t an indication of what each customer is spending, because it’s averaged out, however it’s important because it allows you to calculate the average expenses and profitability per segment (whatever the segments you pick are; game, player tier, etc.).
Improving your average revenue per user in ways that don’t inflate your expenses will always boost your profits. It can also help you calculate growth more accurately.
So how can we improve the average revenue per user?
1. Increase ARPU by designing your platform for growth
With designing for growth, we mean building in those customer journey incentives and motivators into the platform, not just the games. Design a customer journey that moves the customer along higher spending grounds. One little step at a time. The more customisation and knowledge of the customer you can build into this journey, the better your results will be.
For example: when designing the customer journey for a client that starts their player lifetime with you through free slots, you could take note of which game they pick. Is it film based? Is there a particular character they like, or a film they love? Enhance their experience by adding music from the film, and by aligning options for other more expensive games with similar themes. Nudge them along the path to help them find more stuff they like, but do it consciously, in a way that increases spend, a little at a time.
2. Upselling, bundles and cross-selling for better ARPU
It’s easy to see that adding upsells to your customer journey will help improve your overall revenue and also your average revenue per user. Always be thinking of the next thing your player might enjoy. Watch out for patterns of play, perhaps there are certain times during the day where players seem to play longer.
They have more time during this period and therefore it’s a great opportunity to offer them something new to try. Why not bundle up their favourite games with other similar games or different games with the same theme. Pay attention to their behaviour and make sure you translate your knowledge into the best options for the next game or upsell for your players.
3. Keep customer churn at bay
When you create strategies that reduce customer churn, you automatically increase customer lifetime value and therefore average customer spend. This results in increased ARPU. Loyal customers are more open to new offers from you and are more likely to buy your bundles. Focus on player retention and also reactivation.
The clients you already have or had, those people already on your database are worth a lot of money. If you’re not focusing on monetising your existing list of churned and active clients, you’re leaving bags of money on the table.
Acquisition isn’t everything when it comes to boosting revenues and ARPU. Retaining existing customers and decreasing churn by looking at ways to increase loyalty and using reactivation techniques for churned players on your database is key for boosting profitability.
At Enteractive we can help you get more customers from your database back into the game. We’re reactivation specialists with a strong track record. Get in touch to find out how (Re)Activation could work for your company.
Let’s discuss the real figures you can expect to see if you hire our revenue share (Re)Activation services. Contact andrew.foster@enteractive.se for a quick consultation.
