FAQ & key takeaways
How to read this metric
What it measures
Average Order Value (AOV) tracks the average dollar amount spent each time a customer places an order on a website or mobile app. It is a critical KPI for ecommerce businesses to monitor and optimize.
Why it matters
AOV directly impacts your bottom line. By increasing the amount each customer spends, you can increase your total revenue and profit margins without needing to acquire more traffic or customers, which can often be more expensive.
How to increase AOV
- Upselling and Cross-selling: Recommend higher-end versions of products or related items during the checkout process.
- Minimum Order Thresholds: Offer free shipping or a discount if customers reach a certain spending limit (e.g., “Free shipping on orders over $50”).
- Product Bundling: Group related products together and offer them at a slightly lower price than if purchased individually.
- Loyalty Programs: Reward customers for spending more by offering points or exclusive discounts on future purchases.