How does telecom customer support improve Average Revenue Per User (ARPU)?

Average Revenue per User, or ARPU, is a critical metric for telecom and other subscription-based businesses, giving valuable insights into your company’s performance. But how do you ensure that your ARPU is heading in the right direction? 

One often overlooked way to improve ARPU is through quality telecom customer support. Below, we dive into what this term means, why it matters for your business, and how you can leverage telecom customer support to improve ARPU.

What is Average Revenue Per User (ARPU)?

Average Revenue Per User, or ARPU, refers to the amount of revenue your company gets, on average, from each customer during a set period (such as quarterly, yearly etc). You can calculate your company’s ARPU by dividing the total revenue during a set timeframe by the number of customers, or users. 

So, for example, let’s say your regional telecom company made $100,000 in revenue during the first quarter, and you have 10,000 total subscribers. If you divide $100,000 by 10,000 you get an ARPU of $10 per customer.

What’s a good telecom ARPU?

What’s considered a good ARPU varies widely, depending on your industry. However, on average, in telecom, ARPU tends to be around $20. However, it’s important to note this looks at the telecom industry as a whole. Depending on your unique business setup, size (such as whether you’re a national carrier or a regional service provider), your ARPU may be different.

Why does ARPU matter for telecom?

ARPU is a critical business metric for telecom and other subscription-based industries. It helps you understand the average revenue you generate from each of your customers which is critical for making informed marketing and business decisions, and refining your overall strategy. 

By understanding how well your monetization strategies are working, you can identify potential opportunities to further grow your revenue and identify any areas for improvement.

What are some important caveats for understanding ARPU?

Average revenue per user is no doubt a handy metric for giving a broad overview of your company performance, but there are some important things to keep in mind, such as differences in customer segments and the context with regard to other business metrics. 

For example, customer spending often isn’t uniform; different segments spend differently, such as business telecom accounts versus personal accounts. Usually, a business account brings in more money than an individual’s personal plan. 

ARPU also doesn’t take into consideration your customer churn rate. Having a $20 ARPU might seem great, but what if your customer churn has also significantly spiked? It’s important to consider ARPU within the context of your other metrics, rather than looking at it in isolation.

How does telecom customer support improve ARPU?

Now that you know what ARPU is and why it matters, how can you increase your company’s ARPU? Below, we go over a few ways your telecom customer support can improve your ARPU, such as:

• Improving customer retention

• Increasing revenue through upselling and cross-selling opportunities 

• Gathering customer insights 

Let’s dive into each in more detail below.

Improving customer retention

Your telecom customer retention rate, which is often directly impacted by the quality of your customer support, plays a critical role in your business’s ARPU. If your customers are churning at an exceptionally high rate, your ARPU is likely flatlining. 

While these two metrics do measure two separate things, they are often intertwined. Improving your customer retention rate usually can help improve your ARPU, and that’s where your contact center team plays a critical role. 

These days, customer support is critical to retention. 96% of customers will leave after a single bad service experience, which means there’s little room for error. To help ensure your customers have a positive customer support experience, you’ll want to invest in agent training. In particular, establishing a strong agent onboarding program. You’ll also want to consider investing in employee engagement, since engaged employees often lead to better customer experiences and increased customer loyalty. 

Increasing revenue through upselling and cross-selling opportunities

Another way telecom customer support can improve your company’s ARPU is by tapping into upselling and cross-selling opportunities with your existing customers. This is because your customer service team is actively building rapport with your current customer base.

Since there’s already an established relationship, it’s much easier to upsell or cross-sell to a current customer versus a new one. In fact, research shows the likelihood of upselling a current customer is as high as 70%, whereas upselling to a new one is only as high as 20%. 

Additionally, research by Salesforce shows that nearly nine out of 10 customers will likely make another purchase if they have a positive customer experience with your business. This means your contact center team has a vital role to play in increasing your telecom company’s profitability and, in turn, your ARPU. 

Gathering customer insights 

Your agents are your eyes and ears on the ground for gathering valuable insights into what your customers want. Gathering feedback from customers can provide critical insights into current pain points and opportunities for your business.

This can help your telecom business refine its offerings to better meet customer expectations and help boost customer retention efforts. It can also help you better anticipate customers' needs and provide proactive customer service, meaning you anticipate and resolve potential issues before they arise.

Leverage your contact center to improve telecom ARPU

Your contact center is a critical and often overlooked tool to improve your telecom company’s ARPU. Good customer experiences play a vital role in increasing average revenue per user since quality customer service can reduce the likelihood of customer churn, provide valuable customer insights, and make it easier to upsell your current customer base. By focusing on the tips outlined in this guide, your telecom company can begin to put together a strategy to get more value from your customers. 

Now that you know how important the customer experience is to your business, how do you improve it? Download our free guide to learn how to improve agent performance, key metrics to track and more. Grab your copy today.

Frequently Asked Questions (FAQs)

What is average revenue per user (ARPU)?

Average revenue per user, or ARPU for short, refers to the amount of revenue your customers bring in, on average, during a set time period. 

How do you measure ARPU?

You can calculate your ARPU by dividing your total revenue by the total customers. Just make sure that both numbers are from the same time period (ex: Q1)!

Why is ARPU important?

ARPU provides you with a high-level overview of how much revenue you generate from your customers, making it a critical metric for insights into the health of your business. 

What is a good ARPU?

What makes a good ARPU depends on the industry and size of your company. The average ARPU for the telecom industry tends to fall around $20 per user, but it’s important to keep in mind this is an all-encompassing number, meaning it includes large national carriers and regional service providers. Your ARPU may be different, depending on factors like the size of your business, population served, the number of years you’ve been established, etc.

How does telecom customer support improve ARPU?

Good customer service plays a vital role in improving ARPU by reducing the likelihood of customer churn, upselling and cross-selling existing customers and providing valuable customer insights for your business.