Average order value (AOV)

Average order value (AOV) is the average amount spent each time a customer places an order on your ecommerce website or app. 

AOV is one of the most important metrics for an ecommerce company as it impacts key business decisions about pricing, promotions, website/app layout and advertising budget. 

Since ecommerce is a highly dynamic and competitive industry, successful companies track and analyze their AOV on a daily or weekly basis. Maximizing AOV means a business is on the right track in terms of revenue growth and profitability.

Measuring AOV is simple. You only need to divide the total revenue in a specific period by the number of orders placed in that period. 

For example, if your online platform generated $50,000 in July and there were 1230 orders placed, your AOV is 50,000/1230 = $40.65. 

Improving AOV is an essential step toward increasing profitability and customer engagement for a business. The following takeaways help you increase the AOV of your ecommerce business:

According to Invesp, 69% of consumers say their choice of retailer is influenced by where they can earn customer loyalty or rewards program points. This means running an advanced loyalty program is key to motivating consumers to modify their spending habits in order to maximize the benefits of the scheme. 

A simple earn and burn loyalty program isn’t able to move the needle though. You need to integrate a loyalty solution into your tech stack that is able to communicate with other tools such as your customer data platform and create personalized offers and incentives. According to Statista data, 62% of online shoppers said that a brand would lose their loyalty if it delivered an unpersonalized experience. 

Plus, your loyalty solution should be able to run at scale as your customer base continues to grow. Your tool should be able to reward customer actions in real time, incentivizing more interactions and increasing AOV. 

Check out how Share Now worked with Talon.One to build and run a multi-tier loyalty program that rewards customers in no time.