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Understanding ECommerce Data #3: Average Order Value

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How are you going to get your customers to spend more tomorrow if you don’t know what they are spending today? Average Order Value is a very important metric to track over time.

“Understanding Jewelry ECommerce Data” Series Chapters:

Part 1: Customer Lifetime Value

Part 2: Sales Conversion Rate

Part 3: Average Order Value (you are here)

Part 4: Cart Abandonment Rate

Part 5: Email Conversion Rate

Part 6: Social Media Conversion Rate

Part 7: Revenue By Traffic Source

Part 8: Customer Acquisition Cost

Part 9: Percentage Of Returning Customers


You’ll notice a theme among some of the metrics we’ve discussed in this series so far – they’re about repeat business.

We can try to always attract new customers, and we can also try to increase the number and value of sales from our existing customers.

Average Order Value is no different.

So how are you going to get your customers to spend more tomorrow if you don’t know what they are spending today? AOV is a very important metric to track over time.

Observing the increase or decrease of this metric will help you learn whether your marketing is effectively driving your buyers to purchase higher value products or not.

Calculating Your Average Order Value

Average Order Value = Total Revenue / Total Number Of Product Sales

Improving Your Average Order Value

A straightforward way to increase AOV for repeat customers is to create a rewards program with exclusive insights and personalized special offers just for members. More than two thirds of consumers say that earning customer loyalty/rewards points influences their buying decision. With a 5% increase in customer loyalty, the average profit per company would rise 25%-100%.

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