Average Order Value Calculator
Understanding your customers’ buying behavior is crucial to sustain the growth of your online retail store. Average Order Value (AOV) Calculator is one of the most effective and useful tools.
What Is Average Order Value?
Average Order Value measures the amount a customer spends each time they place an order on your website or in store.
The formula is: Total Revenue ÷ Number of Orders
For example, your store made 3,000 in revenue last month from 100 orders, your AOV would be 3%
Why AOV Matters
A high AOV indicates customers are spending much more per transaction, which leads to increased profits – notably when your marketing and operations cost remain the same. An increase in AOV can be more cost-effective than getting new customers. Here’s how tracking AOV helps you:
- Improve segmentation
- Assess the effectiveness of promotions
- Enhance pricing strategies
- Opportunities for upselling and cross-selling
How to Use Data from AOV
- Offer loyalty rewards specifically to high-spending customers.
- Product bundling to allow consumers to buy high-value combinations.
- Offer free shipping a little bit above the AOV to encourage more purchases.
Conclusion
Tracking your Average Order Value isn’t just a simple tool, but it’s beneficial to help you increase your revenue without incurring a high cost of acquiring new customers. Knowing your AOV, you can make smarter and better marketing and product bundling decisions.