Your average order value helps your understand your customer’s buying behaviour.
Lately, we’ve noticed a lot of our clients are focusing on driving as much traffic as possible to their website.
Then their second focal point is increasing their conversion rate on their website.
Of course both are extremely important for success.
But, you need to focus beyond these two goals.
If you have a lot of traffic landing on your site with a high CVR, but your product price is very low, you might be just breaking even or losing money. Especially with the rising costs of advertising these days (and COGs).
Understanding Your Average Order Value
This means there’s another metric you need to keep in mind – your AOV, your average order value.
By increasing your AOV, your revenue should follow accordingly.
Unfortunately a lot of marketers and business owners underestimate the importance of calculating and understanding the AOV.
The more familiar you are with how much your customers actually spend each time they shop at your store, you can adjust your pricing and marketing initiatives accordingly.
Plus, understanding your AOV helps you optimize your current business model because you’ll understand your customers’ shopping behavior and know what to expect.
And, naturally, as you understand your customer’s behavior, you’ll be able to brainstorm ideas to make your product more attractive to your customers leading to a higher returning customer rate.
As you can see, your AOV is directly related to your brand loyalty
Getting to Know Your Customers
Even after the first purchase, paying attention to how much your customers are spending when they return to your store can provide a lot of information about your customer’s behavior.
Tracking their behaviours allows you to create personalized offers and marketing to keep your brand fresh.
And since these customers are returning, it’s likely they’re willing to spend more since they trust and know your brand and products.
Knowing your AOV is a very effective way to increase your revenue.
Maybe even the easiest way.
And, once your increase your profitability, it opens up the door for spending more on your advertising and product development
If you’re interested in finding out ways on how to increase your AOV, make sure to follow us on Instagram, subscribe to our newsletter, and podcasts!
Or feel free to book a call below.
Maryana from DimNiko