Despite the importance of the indicator, the “average turnover” is a rather facebook database concept. Western marketers divide buyers, for example, of an online store into three groups: low, medium and high AOV. Accordingly, the entrepreneur’s task is to determine which flow has the most buyers and adjust the marketing policy to suit the majority.
The average invoice is a composite concept that shows the audience's purchasing power, the company's marketing effectiveness, visitor loyalty, and even the psychological portrait of the average representative of the target audience. In any case, an online business should strive to increase the AOV in order to be considered successful.
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How does the “average paycheck” affect income?
How to calculate AOV?
Ways to increase your average check.
Summary
How does the “average paycheck” affect income?
AOV: What is it in advertising?
The relationship between the AOV indicator and the profit of a company in the online retail sector is direct: an increase in the average check leads to an increase in revenue. We already wrote above that AOV works with the number of orders, not with products. This means that the opportunity to sell more with each purchase has a positive effect on revenue.
A business owner simply needs to determine which customer segment brings the most benefit and develop it.
How to calculate AOV?
To calculate the average bill, it is necessary to obtain data on the number and amount of all purchases in an online store during a certain period of time. The formula seems simple, but there are circumstances that can easily ruin the harmony of the calculations:
Seasonality. If your online business's sales volumes depend on fluctuations in seasonal demand, it is recommended to calculate the average check over short periods. For example, calculate the indicator in the winter months and then in the summer months and compare.
Product matrix, range of services. The larger the store or company, the more difficult it is to calculate the total average bill. Products should be divided into groups and each has its own AOV.
Different target audience segments. Customers can belong to a variety of groups in terms of income, purchasing power and online ordering activity. Accordingly, the average invoice is calculated separately for each segment.
Let's look at the standard formula for calculating the average bill using examples.
