{"id":110,"date":"2022-01-15T18:45:22","date_gmt":"2022-01-15T13:15:22","guid":{"rendered":"http:\/\/super-ali.com\/blog\/?p=110"},"modified":"2022-01-15T18:49:35","modified_gmt":"2022-01-15T13:19:35","slug":"you-got-the-aov-wrong-and-how-to-fix-it","status":"publish","type":"post","link":"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/","title":{"rendered":"You got the AOV wrong ( and how to fix it)"},"content":{"rendered":"\n<p>In this thread, Jayden shares how most store owners are calculating their AOV in the wrong manner (and how to do it right).<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Why your AOV doesn\u2019t necessarily matter\u2026 <br><br>Thread below \ud83e\uddf5<\/p>&mdash; Jayden (@jayden_dummett) <a href=\"https:\/\/twitter.com\/jayden_dummett\/status\/1480221185518546946?ref_src=twsrc%5Etfw\">January 9, 2022<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Often times e-commerce businesses have a goal of raising their average order value. <\/p>\n\n\n\n<p>While I don\u2019t disagree with the fact that raising the average order value should always be a goal, I think the way it\u2019s being done and thought about is wrong.<\/p>\n\n\n\n<p>In order to raise your AOV you have to understand what AOV actually means. <\/p>\n\n\n\n<p>It\u2019s the total revenue from the period of time (minus discounts) divided by the total number of orders. It\u2019s an average.<\/p>\n\n\n\n<p>Now, averages are useful when looking at large data sets to tell a story about multiple different metrics but when you are trying to influence that average it\u2019s pretty useless. <\/p>\n\n\n\n<p>This is especially true for AOV.<\/p>\n\n\n\n<h3>Let&#8217;s setup a scenario:<\/h3>\n\n\n\n<p>We are running an apparel company. For the sake of simplicity they have 2 skus and prices are the following.<\/p>\n\n\n\n<p>Hoodie &#8211; $60<br>T-Shirts &#8211; $20 <\/p>\n\n\n\n<p>10 orders occur with the following values. <\/p>\n\n\n\n<p>$20, $20, $20, $20, $40, $60, $60, $60, $80, $120<\/p>\n\n\n\n<p>Do some quick math and you\u2019ll get these answers. <\/p>\n\n\n\n<p>AOV: $50 <br>Median: $50 <br>Mode: $20<\/p>\n\n\n\n<p>Now what\u2019s interesting about that AOV? It never actually occurs as an order value. <\/p>\n\n\n\n<p>Precisely why it can be misleading as a number that we look at.<\/p>\n\n\n\n<p><strong>Often times businesses will look AOV as a sign to set their free shipping threshold or cost caps on Facebook campaigns. <\/strong><\/p>\n\n\n\n<p>But it\u2019s fundamentally flawed thinking because you are optimizing campaigns and thresholds against orders that don\u2019t exist or happen.<\/p>\n\n\n\n<h3><meta charset=\"utf-8\">So what\u2019s the answer?<\/h3>\n\n\n\n<p>Continuing with the example above we want to figure out the ranges of order values that occurs the most. <\/p>\n\n\n\n<p>Once we find that range we want to figure out what products those orders consist of.<\/p>\n\n\n\n<p>These are the orders that you want influence. This is how you shift the game. <\/p>\n\n\n\n<p>You continuously shift this range of most frequent orders higher and higher. That\u2019s how you do it.<\/p>\n\n\n\n<p><strong>Now let\u2019s talk about how you can do this for your brand outside of this hypothetical.<\/strong><\/p>\n\n\n\n<p><meta charset=\"utf-8\"><meta charset=\"utf-8\"><li>Take your time frame of that you would like to look at. 6-12 months for example. <\/li><\/p>\n\n\n\n<p><li>Export the purchase data for that time frame to an excel sheet.<\/li><\/p>\n\n\n\n<p><li>Sort by order value so all of in ascending order. <\/li><\/p>\n\n\n\n<p><li>Cut out really high\/low purchase value orders that will distort the data.<\/li><\/p>\n\n\n\n<p><li>Now find out what ranges of order values consist of what products.<\/li><\/p>\n\n\n\n<p>These are your AOVs that you should be looking at. <\/p>\n\n\n\n<p>This is what should influence your free shipping threshold and your bid\/cost caps on paid.<\/p>\n\n\n\n<p>If you need a better visual representation and steps on how to find your own mean, median, and mode order values:<\/p>\n\n\n\n<p><a href=\"https:\/\/commonthreadco.com\/blogs\/coachs-corner\/ecommerce-analytics\">https:\/\/commonthreadco.com\/blogs\/coachs-corner\/ecommerce-analytics<\/a><\/p>\n\n\n\n<p>If you enjoyed this post, Do thank <a href=\"https:\/\/twitter.com\/jayden_dummett\" target=\"_blank\" rel=\"noreferrer noopener\">Jayden<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this thread, Jayden shares how most store owners are calculating their AOV in the wrong manner (and how to do it right). Often times e-commerce businesses have a goal of raising their average order value. While I don\u2019t disagree with the fact that raising the average order value should always be a goal, I&hellip; <a class=\"more-link\" href=\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\">Continue reading <span class=\"screen-reader-text\">You got the AOV wrong ( and how to fix it)<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>You got the AOV wrong ( and how to fix it) - Super-Ali Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"You got the AOV wrong ( and how to fix it)\" \/>\n<meta property=\"og:description\" content=\"In this thread, Jayden shares how most store owners are calculating their AOV in the wrong manner (and how to do it right).\" \/>\n<meta property=\"og:url\" content=\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\" \/>\n<meta property=\"og:site_name\" content=\"Super-Ali Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/superalicom\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-15T13:15:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-15T13:19:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/super-ali.com\/blog\/wp-content\/uploads\/2022\/01\/Tweet-by-Jayden.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1640\" \/>\n\t<meta property=\"og:image:height\" content=\"762\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Honey\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@superalicom\" \/>\n<meta name=\"twitter:site\" content=\"@superalicom\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Honey\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\"},\"author\":{\"name\":\"Honey\",\"@id\":\"https:\/\/super-ali.com\/blog\/#\/schema\/person\/702e9cc913f71eafa71986a1524bec69\"},\"headline\":\"You got the AOV wrong ( and how to fix it)\",\"datePublished\":\"2022-01-15T13:15:22+00:00\",\"dateModified\":\"2022-01-15T13:19:35+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\"},\"wordCount\":488,\"commentCount\":1,\"publisher\":{\"@id\":\"https:\/\/super-ali.com\/blog\/#organization\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\",\"url\":\"https:\/\/super-ali.com\/blog\/you-got-the-aov-wrong-and-how-to-fix-it\/\",\"name\":\"You got the AOV wrong ( and how to fix it) - 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