Maximizing your Average Order Value is one of the best ways to improve your sales and marketing strategy. By definition, Average Order Value (AOV) is exactly how it sounds; it’s the average amount spent per order. This gives your business the ability to better understand your pricing and revenue strategies. While the metric seems simple on the surface, it offers valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.
You can calculate AOV by dividing total revenue by total number of orders. AOV can be assessed for various time-periods (i.e. day, week, month, year) and, if your sales are tied to certain products or platforms, you can assign a specific AOV for each.
If you’re confused about how to define total revenue and total number of orders, we’ve included some nifty definitions and examples below:
When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your AOV for the month, you should include it in the next month’s AOV as well. Having consistent metrics will allow you to better identify the causes of good or bad performance. For instance, if, over the past few months, you’ve started cross-selling related products at check-out and your AOV increased, then you’ll know that action was productive in expanding order size!
It can be difficult to calculate this metric in Google Ads, but we have a quick and easy solution, Lido.app. Read below to learn more and get started today.
Lido allows you to connect, analyze, and visualize all of your data in a single spreadsheet. Don't wait for engineers to build analysis dashboards! Lido provides a simple and easy solution to importing data from numerous platforms. Automatically import data from your favorite platforms such as Shopify, Facebook, Google Analytics, and many more and apply Lido's software to extract meaningful metrics from them. After applying Lido software to your data, you will be left with sleek, attractive dashboards to share with your stakeholders, rather than confusing and jumbled raw data. Furthermore, the dashboards are easily editable to focus on specific data or metrics.
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