Average Order Value (AOV)

Average order value (AOV) is the average amount spent by a customer per order. To calculate your company’s average order value, simply use this formula:

Average Order Value (AOV) = Total Revenue/Number of Orders

Let’s understand AOV with an example:

Suppose you got 100 orders in April, which you successfully delivered to your customers and generated $3,000 in total. Now, let’s use the formula to calculate AOV: $3,000/100 = $30

It’s imperative to know your company’s AOV because it tells you how effective your online marketing efforts and pricing strategy are. If AOV is low, you are either not promoting your offers correctly or have premium pricing for your products, or both.

To increase AOV, you can go for these tried-and-tested methods:

  • Share product recommendations
  • Offer discounts and sales coupons
  • Run referral programs
  • Promote combo offers
  • Reward customers with loyalty coupons
  • Offer free shipping on orders

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