Average order value (AOV) is the amount customers spend per order, on average.
The formula to calculate it is really straightforward. Divide your revenue by the number of orders you’ve had in a given timeframe and you’ll get AOV.
Say you want to know your AOV for a specific month. Revenue is $5580 and you’ve had 100 orders. Your AOV for the month is $55.80.
AOV is one of the most important KPIs for ecommerce brands to track. Knowing the average amount a customer is going to spend on an order gives you a much better sense of what you should be spending on your marketing efforts across the board.
Common strategies for increasing AOV include cross-selling, upselling, and bundling. Because it’s cheaper to improve relationships with current customers than it is to acquire new ones. And you already know they’re interested in your products.