|
Definition: The AOV, or average order value, is a key metric for any business with an online presence. This telling number helps to discern what a company needs to do in the future to stay profitable. For example, a high AOV metric might call for more advertising spending. It also helps to determine how products are priced and arranged in your store. AOV is calculated using the average order value of a customer, not the average order value per session. One customer may come back more than once to purchase products, but the AOV of those transactions will be averaged together. One customer may return to make multiple orders, but each order is calculated separately and will not affect AOV. You can improve your positioning and marketing efforts for those big-ticket items by increasing their AOV. Doing so will increase your business’ ROI and ROAS for all marketing efforts. The higher your AOV, the more customers you’re getting out of every dollar spent to acquire them. The more expensive your products are, the more potential you have to improve your marketing and positioning efforts. If people buy more expensive items, then they will be more likely to buy them again and thus increase your long-term ROI and ROAS. Investing in high-margin items helps online businesses make more money and, as a result, they can reinvest that money into marketing and advertising. You should be monitoring AOV as closely as any other business metric. But don’t just stop with monthly reports — you should review it daily, weekly, or even monthly if needed. When you notice any dips or peaks in AOV, you should thoroughly examine your business to see what may have caused the change. New campaigns, buying seasons, and even new website designs could affect your AOV. Another strategy you could use to enhance your marketing is applying multi-touch attribution. Especially if you are using Salesforce, there are many good alternatives. Hence, if you are using Salesforce, multi-touch attribution is a must-do!
|
