30-second summary:
- Running an ecommerce store makes it a must to know customers’ buying habits, insights about your marketing campaign performance, and how well your pricing strategy is performing.
- However, your average order value (AOV) can be a key to getting more into customers’ carts and increasing your revenue.
- Kevin Payne lets you in on how you can increase your AOV through some smart, simple, and effective methods.
When you’re running an ecommerce store[1], you should know that average order value (AOV) can help you get to know your customers’ buying habits, insights about your marketing campaign performance, and how well your pricing strategy is performing.
In this post, we’ll talk about what AOV is, the simple formula to calculate it, and how to increase the AOV of your own ecommerce store.
What is “Average Order Value” (AOV) and how it works
Average order value refers to how much each customer spends per cart checkout with your store. It’s calculated by dividing your total revenue in a given period by your total number of orders in that same period.
So say your total revenue in a single month was $40,000 and you had 1,000 total orders that month. That means your AOV is $40.
Increasing your AOV may be more effective at boosting your overall sales and revenue than, say, focusing on getting more store visitors. This is because you’d be earning more per customer from the start who are purchasing more or higher-priced products instead of trying to get more customers to purchase, say, one item at a time.
Nine tips to increase your ecommerce store’s AOV
With all the newest developments we see in ecommerce software[2] and seeing better research about consumer ecommerce habits[3], there are several new