Average order value (AOV) measures the average amount one customer spends on a given purchase. This metric conveys how well you upsell/cross-sell products on your site, whether through product recommendations or based on how easy you make it to add products to your cart.
Average Order Value is calculated by dividing your total revenue during a time period by the total number of orders you received.
This can also help you measure the effectiveness of your pricing model and cross-selling tactics. For example, if your AOV continuously decreases this could be a result of changes in consumer spending habits, or could suggest customers aren’t finding value in your cross-sell recommendations.
The most effective way to use AOV in your marketing efforts is to understand your average order size by each referring source of paid or organic traffic (e.g. organic search, direct visitors, SEO referred, programmatic referred, etc) so as to identify the channels most likely to deliver the greatest return.
The same analysis should be applied to each of your known audience segments (e.g. new visitors, returning visitors, persona groups, repeat customers, etc.) to help identify which audiences are likely to deliver the greatest return, and more importantly, areas of focus to lean into for improvement.
A few ideas for increasing average order value: