Average order value (AOV)
Also known as: AOV, average check, average transaction value, average basket size
Average order value (AOV) is the revenue from orders in a period divided by the number of orders placed in that period.
AOV = revenue from orders / number of ordersAOV tells you how much a customer spends in one transaction. It says nothing about how often they come back. That is the difference from ARPU, which divides revenue by customers instead of orders, so one customer with five orders counts once in ARPU and five times in AOV.
Example
An outpatient clinic in a month records 1,800 paid visits worth $243,000 in total.
AOV = $243,000 / 1,800 = $135.
The same month, 1,200 unique patients made those visits. Revenue per patient is $243,000 / 1,200 = $202.50. The gap between $135 and $202.50 comes from patients who visited more than once. The numbers are illustrative and show the arithmetic only.
How to use it
AOV is one of the three levers in a simple revenue model: number of customers, orders per customer and value per order. Track it weekly next to the repeat purchase rate, because a bundle or upsell that lifts AOV can also cut how often people return.
Split AOV by channel and by first versus repeat order. A paid campaign that brings in $60 first orders may still be worth it if those customers later place $150 orders. To judge that, look at customer lifetime value, not at AOV alone.
Use the median as well as the mean. A few large corporate orders can move the mean while the typical order stays flat.
Common mistakes
- Including refunds and cancelled orders in revenue but not in the order count, or the other way round.
- Mixing gross revenue with VAT and net revenue across months, so AOV jumps for accounting reasons.
- Raising AOV with discounts on bundles and not checking what happened to margin per order.
- Comparing AOV across segments with very different products, for example a $40 consultation and a $3,000 procedure in one average.