Average order values

Average order values (AOV’s) are a must to know if you run a product based and/or e-commerce business. By calculating your average order value you can build a truly sustainable business, which will help you to optimise how you market your products and where you can improve. So what is an average order value?

An average order value is defined as a metric that measures the average total value of each customer’s purchases. This can be measured in set periods allowing you to see how your marketing efforts have either improved or worsened your overall average order value so you can better tailor your products to your audience. 

The benefits of calculating your average order value

Well, aside from the obvious in that you can successfully measure your customers spending habits there are a range of not so obvious benefits. This includes:

  • Consumer data such as demographics and socio-economic status. This can be crucial in re-targeting previous customers or providing insights into your audience you may have been previously unaware of.
  • Consumer spending habits. This can allow you to cross reference this with outside interference such as inflation, global events and data to compare with competitors. 
  • Measurable data with or without using unique tracking metrics (UTM’s) to pinpoint whether a specific social media post, email campaign or keyword directed this customer to you.

So how do I calculate my average order value?

All you need to do is follow this formula:


Average Order Value (AOV) = Total Revenue / Number of Orders

To provide an example, if your total revenue for a given period is £10,000 and you received 500 orders during that time, the AOV would be:

AOV = £10,000 / 500 = £20

Therefore, the average order value for that period would be £20.

How can I improve my average order value?

Thankfully there are a number of steps you can take to improve your bottom line but they all require being able to analyse and interpret your data. Here are some of the steps you could take:

Curate specific content

By analysing the data of customers who have placed orders, you can use their data to curate content specific to that type of audience. This is otherwise referred to as segmentation. By marketing using their demographics, interests and behaviours you can improve your click through rate with paid advertising, which in turn reduces your ad spend and increases your profit.

Cross sell and upsell

Analyse what products customers may choose in the same order. This can indicate complimentary products to you, that you can in turn suggest to customers on your website. In turn, this will increase the likelihood that future customers will add more items to their cart.

Create bundle offers

A direct way to increase your bottom line is to encourage customers to buy multiple items together at a “discounted” price. Consider how you take risks with purchasing from new companies. If you are unsure of the quality, what to expect or how this will be delivered you can entice customers to buy by offering “more”. Of course how you price this to look as if customers will save money, is entirely up to you. 

“Free” shipping

Another psychological factor to take into account with sales, is making the customer feel that they are gaining benefits for purchasing through you. Bundle or sale offers are one way to do this, but one of the best incentives you can offer is free shipping. You could offer this after a customer spends a specific amount. Factor your shipping costs into the product price to ensure that you do not lose out on revenue whilst still offering a great deal.

Create a loyalty program

Reward your repeat customers by offering points, coupons, discounts for reaching certain spending thresholds. If you’ve successfully made your customer fall in love with your product, then this is the icing on the cake. 

Of course, calculating your businesses revenue is not for everyone. Nor is knowing how to successfully curate content and segment audiences to increase your revenue, and that’s where we can help. Contact us below.

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