Average Order Value (AOV) is a metric that measures the average total of every order placed with a merchant over a defined period of time. AOV is an important metric to keep track of, as it can help drive key business decisions including product pricing.
In PhotoDay, a studio’s AOV = gross sales ÷ number of orders.
How AOV is calculated
A studio’s AOV is calculated via dividing gross sales by the number of orders.
Gross sales include taxes, shipping, and AdvancePay credits applied.
This means, if a customer uses an AdvancePay (AP) credit for part or all of their purchase, the AP credit used is counted as part of the gross sales.
AOV is gross sales revenue, prior to any discounts that are applied.
It does not describe gross profit or profit margins, but can offer insight into how those figures are affected.
Where to find your AOV
Studios can find their Average Order Value by logging into their Studio Panel > Home page > Sales.
Why AOV is useful
Knowing your AOV can give you valuable insight into customer behavior. The higher your AOV, the more each customer is spending.
If you’re happy with your AOV, you can focus on expanding your business, thus growing your customer count and your overall sales.
If you’d like to boost your AOV, there are plenty of strategies to try out! For example, you can revamp your price list and packages, create a free shipping offer with a minimum order value, incentivize or require AP, etc. One of PhotoDay’s favorite suggestions for boosting AOV is to simply create more images to sell. Images are inventory, so why not offer more? You can do this by offering color + black and white edits, vertical + horizontal crops, buddy poses, smiling + serious + goofy + poses—the options are endless.
Want to learn more about how to boost your Average Order Value with AdvancePay? Read the blog!