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Average order value (AOV)

A metric that calculates the average value of each order a customer places with a business over a certain time frame.

Average order value (AOV)

What is average order value (AOV) ?

The term “average order value,” or AOV, refers to the monetary amount that is typically spent by customers whenever they place an order using a mobile app or website. 

Divide the overall revenue of your business by the total number of orders to arrive at the average order value for your organization.

For illustration’s sake, let’s say that throughout November, the total number of orders placed in your online business was 100, and the revenue generated was $1,000. 

$1,000 divided by 100 equals $10. Thus the monthly average revenue for November was $10.

The average order value (AOV) is a critical performance indicator that online firms measure to get insight into the shopping behaviors of their clients. 

Similar to other important indicators, AOV can be monitored at any time; however, most businesses focus on the moving monthly average.


Why does AOV matter?

Your total internet marketing efforts and pricing plan may be evaluated more effectively with the assistance of knowing your company’s average order value because this provides you with the data required to analyze the long-term value of individual clients.

The AOV serves as a standard for measuring customers’ behavior, enabling you to establish goals and strategies and evaluate the effectiveness of such tactics.

Sometimes, marketers will focus most of their efforts on raising the number of visitors to a website when it would be more beneficial and lucrative for them to improve their average order value. 

Growing traffic often increases expenses, although expanding average order value does not.

Since there is a transaction fee associated with each sale, boosting your average order value is a strategy to drive direct revenue and increase your profits when people are already buying from your store. This is because there is a transaction cost involved with each order.


Seven tips for enhancing average order value (AOV)

There are a variety of different approaches that could raise the average order value of your customers. 

These methods are simply different ways to induce your customer to spend more money, either by purchasing more things than they had initially intended to buy or by purchasing more expensive products than they had originally planned to buy.

Increasing your average order value (AOV) can be improved during any sales process stage. 

You can encourage your consumer to buy extra products related to what they already have in their shopping cart. These products, such as light bulbs or batteries accompanying electronic equipment, could be easily forgotten. 

You also have the option of suggesting that they look into a more pricey alternative, one that is possibly even one of the best sellers in the market.

Getting a customer to spend more money can be accomplished through strategic merchandising practices, such as putting an alluring selection of products in front of them and displaying them, so they are motivated to purchase, or through direct incentives, such as offering free shipping. Both of these approaches are effective in achieving this goal.


The following are examples of effective ways to raise AOV:

Cross-selling: The phrase “How about some socks to go with the cricket shoes you just ordered?” is an example of cross-selling.

Upselling: Attempting to upsell the customer by asking, “Would you like this pair of running shoes for only $50 more than the pair that is now in your cart?”

Price discounts for bulk purchases: “Each of these socks costs $9, but if you buy three or more, you’ll receive a 50% discount.”

Delivery without charge: (for a higher minimum purchase)

Coupons: There are coupons available that say, “Spend $50 and get $5 off your next purchase!”

Donations: (to a nonprofit for minimum purchase) (to a nonprofit for minimum purchase)

Our return policy: “Please do not hesitate to return them if you are dissatisfied.”

A fantastic method for putting these methods into action is to divide your consumer base into several distinct categories based on their shopping habits, such as low-frequency versus high-frequency customers and low-spending versus high-spending customers. 

Offers explicitly tailored to each category should be your focus. 

For instance, enrolling your high-frequency buyers in loyalty programs can help you increase their average order value.


Remember these additional important e-commerce critical metrics:

Increasing your gross profit by improving your average order value can be an excellent strategy. Still, you need also make sure you’re keeping an eye on a few other crucial indicators, such as the following:

Conversion Rate: The conversion rate is calculated by dividing the number of customers purchased by the total number of people who visited the website. 

It would be counterproductive to raise your average order value only to discover that your conversion rates have dropped.

Revenue per Visitor: The amount of money made by a consumer who visits your website is referred to as the Revenue per Visitor (RPV), measured in dollars.


How testing with A/B variants can assist in increasing your average order value

There are dozens, if not hundreds, of ways to increase the average order value (AOV). Every website and app caters to a distinct group of users and products. 

You can try out a variety of headlines, pictures, and calls to action within each particular strategy by experimenting with the various options provided.

Consider the practice of cross-selling as an illustration. 

You may compare your standard shopping cart to a variant containing a message and image stating, “People who bought this also frequently bought this,” to determine whether the average order value (AOV) increases with the variant. 

Then you might test a different message, such as “Recommended products for you,” to determine which results in the highest average order value.

Because there are so many different ways your AOV can be increased, you will need to design a systematic sequence of A/B tests that will enable you to collect sufficient data for each test to optimize it for conversion.

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