Average Order Value (AOV)
Online – average value of each completed online transaction
What is Average Order Value (AOV)?
Average order value is the average amount spent each time a customer places an order. It divides online revenue by the number of orders.
It is a lever for growth that does not need more traffic. Raising the average order value increases the revenue and often the profit from every visitor who buys.
How this KPI is measured
- Function
- Marketing
- Sub-function
- eCommerce
- Industry
- All Industries
- Type
- Lagging
- Impact
- Revenue
- Unit
- $
- Measurement frequency
- Daily / Weekly
- Formula
- Total online revenue / Number of online transactions
How to calculate it
Divide total online revenue by the number of online transactions in the same period.
For example, if a shop took 90,000 in a month from 1,800 orders, the average order value is 90,000 / 1,800 = 50.
An average can be distorted by a few very large orders, so also look at the median and at the spread of order values. Compare by customer segment, channel and product category.
Where it is used
Increasing revenue per customer
Test bundles, upsells and thresholds that encourage larger baskets.
Setting free-delivery thresholds
Choose a threshold that nudges customers to add items without putting them off.
Planning marketing spend
Work out how much you can afford to pay to win an order.
How to improve it
Tips and common mistakes
- Track it alongside conversion rate. Pushing order value too hard can reduce the number of orders.
- Look at the median as well as the average, since large orders can skew the mean.
- Segment by new and returning customers, who often behave very differently.
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