Definition: The Average Order Value is a metric that measures the total amount per order from every customer over a certain period of time. This e-commerce metric is a crucial factor in many important business decisions. It can affect advertising spend, store layout, and pricing, just to name a few.
AOV (metric) is determined by sales per order, not sales per customer. However, one person may come back to buy multiple times and each order would be considered separately. AOV stands for “average order value.” It measures the average dollar amount of transactions on each order, not per customer. Although one customer may make more than one purchase, the total dollar amount of their transactions would be counted separately for AOV. The more expensive items have higher margins, so why not spend some time optimizing your positioning and marketing for them? If you increase your average order value, your return on investment will increase too. Marketers should always be on the lookout for ways to push up their AOV because it can lead to higher conversion rates. Although customers are browsing your website for the cheapest products, you can’t forget about your premium inventory. The more expensive products have higher margins, meaning it’s important to allocate more resources to the marketing and promotion of these items. Higher AOVs mean higher ROIs and ROASs for all marketing efforts. The more expensive the product, the more customers are getting out of it.
If you want to find more ways to increase ROAS, you should consider applying multi-touch attribution. Especially for marketers who use Salesforce, multi-touch attribution can be a useful model to apply in softwares like Datorama.
You should monitor your AOV metric daily or weekly. If there are any dips or peaks, you should examine every aspect of the business to find out what may have caused them. For example, if people stop buying your products for some reason, you should make sure to see if there’s a new ad campaign or buying season that may be causing it. You should also look at your website to see if there were any cosmetic changes that may be causing the increase or decrease in AOV.