AOV, or Average Order Value, is an important metric for online stores to be aware of. It drives key business decisions such as advertising spend, store layout, and product pricing. Whether you’re a small startup or a large, international corporation, average order value (AOV) is an indisputable metric for measuring the success of your ecommerce store. This powerful metric informs key business decisions such as advertising spend, product pricing, and store layout.
The Average Order Value metric is determined by the total sales made per order, not per customer. One customer may buy from your business multiple times, but each purchase would be calculated into AOV separately. AOV is calculated by dividing the amount of money spent in a store or online by the total number of orders. Although one customer may place multiple orders, each order is counted individually. AOV, or average order value, is a great way to increase your ROI and ROAS. When you have a higher AOV, it means you’re getting more out of every customer and every dollar spent in marketing. Assuming that more expensive items have higher margins, it’s easy to see how positioning and marketing efforts can be improved. By increasing AOV, online businesses are not only getting more from each customer but improving their ROI and ROAS for all marketing efforts. Online businesses should be thinking carefully about how to improve margins for higher-priced items. By increasing the average order value (AOV), they can increase their return on investment and return on advertising spend for each marketing effort. All marketing efforts become more profitable when an e-retailer has a higher AOV, and as a result, they’re getting more out of every buyer — and every dollar spent to acquire those customers.
Average order value is also a very relevant metric and part of the Incrementality by Odyssey app for Salesforce Marketing Cloud Intelligence.If you want access to incrementality insights in Salesforce, multi-touch attribution insights by Odyssey are the best and most reliable way to get this.
How are you measuring AOV? It should be monitored as closely as any other metric. When there is a dip or peak, every aspect of the business should be examined to figure out what may have caused the trend. For instance, new campaigns, buying seasons, or even website changes might affect the fluctuations in AOV.