Diagnose daily fluctuations in Average Order Value to inform your product pricing, promotions, and merchandising strategy.
Average Order Value (AOV) is an easy formula, but the challenge is analyzing the many factors impacting the metric. With loyalty programs, promotions, changing product SKUs, discounts, different sales channels, bundles, customer cohorts, items per order, and more, quickly diagnosing which factors are actually impacting AOV takes hours of hypothesis testing.
You can easily monitor when AOV changes, but if you’re not diagnosing the critical factors driving the change, you’ll miss key signals about why that metric is changing.
AOV measures the average amount spent on every order placed with a merchant in a specific period of time. To calculate, you’d typically use:
AOV = total revenue / # of orders
Get the most reliable answers on what’s impacting your revenue metrics by tracking AOV at the transaction or order level. Each row should represent a unique transaction, with one per transaction.
When you’re analyzing AOV, make your datasets as wide as possible. Start with the recommended fields below and add as many descriptive variables as you can to augment your analysis.
Product Title / Name
Total Item Quantity
Customer City, State, Zip
First Order Date
Last Order Date
Customer Success Tickets
Order Fulfillment Diff Days
Order Fulfillment Diff Hours