Average Order Value

AOV is the measure of the average total value of orders placed by each customer over a given period of time. This is calculated based on the total revenue generated from your customers, divided by the total number of orders placed. 

For example, your eCommerce website sells various products of values $15, $17, $19, $20, $23. And your monthly sales for October amounts to about $120,000 with a total of 6000 orders. Your AOV for October would be $20 ( $120,000/6000).

Optimizing AOV will directly help you improve your customer lifetime value (CLTV). In order to optimize your AOV, you need to increase your purchased cart value per order. To increase this, you need to focus and work on the following three levers that go hand-in-hand. 

  • Converting Carts: Every completed cart per session boosts your AOV. Leverage tactics like urgency to close carts faster and provide incentives on minimum cart amount to ensure higher AOV. 
  • Number of Products: There are two ways to look at this metric. You can either get customers to buy products related to the primary product in their cart or get them to increase the quantity of the primary product itself. The former can be achieved by cross-selling and the latter can be achieved by volume discounts. 
  • Price of the Product: Nudging the users to buy a higher price variant of the product they are looking for and effectively upselling them if possible. 

Check out our resources for more details: A short guide to optimizing eCommerce AOV