Average Order Value (AOV)(AOV)
The average dollar amount spent each time a customer places an order, calculated by dividing total revenue by the number of orders.
Definition
Average order value (AOV) measures how much customers spend per transaction on average. It is calculated by dividing total revenue by the total number of orders over a given period. In email marketing, AOV is a key metric for evaluating the effectiveness of upsell, cross-sell, and bundle promotion campaigns. Higher AOV means more revenue per customer interaction.
Why It Matters
Increasing AOV is one of the most efficient ways to grow e-commerce revenue because you are generating more revenue from existing traffic and customers rather than spending more on acquisition. Email campaigns specifically designed to increase AOV (cross-sells, bundles, minimum-spend offers) can significantly impact profitability.
How It Works
Track AOV by dividing your total revenue by the number of orders for any given period. Compare AOV across different customer segments, traffic sources, and email campaigns. Email marketing increases AOV through product recommendations, bundle offers, minimum-spend incentives (free shipping over $50), and curated collections that encourage adding more items to the cart.
Best Practices
- 1Segment email campaigns by customer AOV to target different spending levels
- 2Use cross-sell emails post-purchase to drive additional complementary purchases
- 3Offer free shipping thresholds slightly above your current AOV to encourage larger orders
- 4Test bundle offers in email that provide savings compared to buying items individually
- 5Track AOV by email campaign to identify which promotions drive the highest order values
- 6Compare AOV from email-attributed orders vs other channels to measure email impact