Average Revenue per Daily Active User (ARPDAU) is a performance metric denoting a user's daily value to a business.
ARPDAU represents the average revenue generated from each active user on a daily basis. It is extensively used in the digital and e-commerce sectors to gauge the daily value of a user to a platform or service. ARPDAU is usually a day-by-day snapshot of customer value that can help businesses better understand their revenue generation per user.
ARPDAU = Total Revenue / Number Of Active Users Per Day
Let's say, an e-commerce platform generates $10,000 in a day and had 2,000 users active that day, then ARPDAU = $10,000/2,000 = $5. Therefore, the average revenue earned per daily active user is $5.
ARPDAU is a crucial metric for e-commerce businesses as it helps reveal how well the business is monetizing its users on a daily basis. With the aid of this metric, companies can spot trends, patterns and fluctuations in user activity versus the income generated. By doing so, they can make informed decisions about how to better optimize the user journey, enhance engagement, introduce new features or offerings to increase revenue.
Improving the ARPDAU often revolves around increasing user spending and/or user activity. This can be achieved through strategies like personalized offerings, user-friendly interfaces, incentivized upselling, special offers and gamifying the shopping experience.
ARPDAU is intrinsically related to various other e-commerce metrics such as Average Order Value (AOV), Conversion Rate (CR), and User Retention Rate (URR). For instance, an increase in AOV or CR would boost the ARPDAU, while higher URR signifies more chances for increased ARPDAU in the long-run.