Glossary > Average Order Value (AOV)

Average Order Value (AOV)

What is AOV?

Average Order Value (AOV) is an ecommerce metric that tells you how much, on average, your customers are spending per order on your website. This is measured over a defined period of time (generally in months, quarters, or even years). AOV is always something that you want to increase. Not only do you want to build customer loyalty by getting your customers to make purchases more frequently, but you also want to maximize the value of each of their individual orders. Tracking the AOV of your transactions can help you set benchmarks for future sales and can help you make incisive decisions for your marketing and pricing strategies.

How to Calculate Average Order Value

You can calculate your AOV by simply dividing your revenue for the given period by total number of transactions within that same period. Total revenue / total number of transactions = Average Order Value (AOV). Knowing your AOV on a monthly basis can help you drive new strategies for growth. Ways to increase your AOV include: creating customer loyalty programs, running promotions, creating new bundles for items that are frequently purchased together, and re-targeting customers with content and product suggestions that you know they’ll respond to based on your data.

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