FAQ: Common Metrics - ARPU 2

Frequently Asked Questions SQL FAQ
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This community-built FAQ covers the “ARPU 2” exercise from the lesson “Common Metrics”.

Paths and Courses
This exercise can be found in the following Codecademy content:

SQL: Analyzing Business Metrics

FAQs on the exercise ARPU 2

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3

This topic states: “ARPU increases if more players are choosing to purchase, even if the purchase size stays consistent.”

However, I disagree with this logic.

Here’s why:

Let’s say that on day 1 there are:

  • 50 purchasing users who all make $10 purchases
    And
  • 50 non-purchasing users

ARPU = $500 / 100
= $5

Therefore, ARPU for day 1 is $5/user

Now, let’s say on day 2 there is:

  • 100 purchasing users that all make $10 purchases
    And
  • 100 non-purchasing users

ARPU = $1000 / 100
= $5

Therefore ARPU for day 2 is also $5/user

My point being: The amount of purchasing users doubled from day 1 to day 2 … BUT the amount of non-purchasing users ALSO doubled … there is 50 more purchasing users on day 2 than on day 1 … yet the number of non-purchasing users offsets the ARPU calculation if they increase at the same day-to-day rate that the purchasing users do … So THEREFORE ARPU does not NECESSARILY increase if the number of purchasing users increases and the purchasing size stays consistent.

4

Would love it if anyone had any insights.