AOV
Average Order Value
Revenue
The average amount spent each time a customer places an order. Increasing AOV is a key lever for revenue growth without acquiring new customers.
What is AOV?
Average Order Value (AOV) measures the average dollar amount spent when a customer places an order. It's a crucial metric for e-commerce and DTC brands looking to maximize revenue from existing traffic.
Tactics to increase AOV:
- Free shipping thresholds
- Product bundling
- Upsells and cross-sells
- Volume discounts
- Limited-time promotions
- Loyalty rewards for larger orders
AOV is particularly important because increasing it doesn't require acquiring new customers—you're getting more value from your existing traffic.
Formula
AOV = Total Revenue ÷ Number of Orders
Example
If you made $50,000 from 1,000 orders, your AOV is $50.
Why AOV Matters
Increasing AOV improves profitability without increasing customer acquisition costs.
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