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Average order value
Average order value
Average Order Value is a metric that is used to measure the average total of every order placed with a seller over a specific period of time.
AOV is a key metric that is used by online businesses to understand the purchasing habits of their customers.
Formula to calculate average order value
AOV= Revenue/Total number of orders
For example, let’s say in the month of January your website store’s sales were $20,000 and you had a total of 500 orders. So by using the formula, your average order value in the month of January was $40.
Importance of average order value
The average order value of a company helps you to evaluate your marketing strategies and measure the long-term value of your customers.
It is more profitable to increase the average order value because it does not cost you anything. It’s all about the right strategies and offers that you can provide to the customers.
It is a way to increase your profits and drive direct revenue
Strategies for increasing Average order value
Upselling(“would you like this T-shirt for only $15 more than the pair in your cart?”)
Cross-selling(“How about a T-shirt to go with the jeans you just ordered?”)
Free shipping (“shop for $5 to get free shipping”)
Volume discounts(“This soap costs $8, but you’ll save 20% if you buy 2 or more”)
Coupons on minimum order(“spend $40 and get $10 off on your next order”)
Donations(“to be given to non-profit organizations on minimum purchase”)
Return policy(“you can send them back if you are not satisfied”)
Average Order Value is a metric that is used to measure the average total of every order placed with a seller over a specific period of time.
AOV is a key metric that is used by online businesses to understand the purchasing habits of their customers.
Formula to calculate average order value
AOV= Revenue/Total number of orders
For example, let’s say in the month of January your website store’s sales were $20,000 and you had a total of 500 orders. So by using the formula, your average order value in the month of January was $40.
Importance of average order value
The average order value of a company helps you to evaluate your marketing strategies and measure the long-term value of your customers.
It is more profitable to increase the average order value because it does not cost you anything. It’s all about the right strategies and offers that you can provide to the customers.
It is a way to increase your profits and drive direct revenue
Strategies for increasing Average order value
Upselling(“would you like this T-shirt for only $15 more than the pair in your cart?”)
Cross-selling(“How about a T-shirt to go with the jeans you just ordered?”)
Free shipping (“shop for $5 to get free shipping”)
Volume discounts(“This soap costs $8, but you’ll save 20% if you buy 2 or more”)
Coupons on minimum order(“spend $40 and get $10 off on your next order”)
Donations(“to be given to non-profit organizations on minimum purchase”)
Return policy(“you can send them back if you are not satisfied”)
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