Value of New Orders Average Order Value

What is the Value of New Orders? What is the Average Order Value?

The New Order Value displays how much the last customer spent on your website, or how much you earned at a discrete point in time. You’ll therefore have real-time data from the specific period (day, week, month, etc.) you choose to measure. This KPI is relevant for use by your finance team, but sales and marketing departments will probably find it useful as well.

Meanwhile, the Average Order Value displays the average amount customers spend on new orders on your website. This KPI thus provides an idea of the budget your consumer base is willing to spend on your products. As with New Order Value, Average Order Value is a particularly important metric for your finance team to track, though sales and marketing departments will also find it valuable.

Both of these metrics are helpful in offering a more complete understanding of customer behavior when they interact with your brand or products. With the knowledge these KPIs provide, you can more accurately design your business strategy depending on whether you want to maintain or increase these figures in the future.

Why are these KPIs worth measuring?

Both Value of New Orders and Average Order Value are important because they can give you insight into your customers’ purchasing process on your website. Let’s say customers are currently spending less than before. This could be due to a new online feature that’s not working, a pricing strategy that should be reconsidered, dissatisfaction with your product or service, or various other factors.

On the other hand, these metrics can provide valuable insight into what you’re doing right – apart from ideas that can be implemented to increase these figures. With this in mind, you can use these KPIs to plan your business strategy, especially regarding your investment in online versus offline marketing.

Calculating your Average Order Value

Note that Average Order Value is a measure of the mean, or total amount of revenue divided by number of orders. While this will provide a good snapshot glance of your order value, it won’t inform you of the most frequently ordered value (mode) nor the middle value (median) in your dataset. So it’s advisable to take this value in context with other, related KPIs.

How to increase Value of New Orders and Average Order Value

The best way to increase Value of New Orders and Average Order Value is to make your online shopping infrastructure as user-friendly as possible. Having an efficient, intuitive online platform where your products are purchased will increase your sales and thereby your Value of New Orders and Average Order Value.

There are other marketing strategies you can use to nudge customers towards making larger purchases, which in turn will increase your Value of New Orders and Average Order Value. Examples include:

• Cross-selling and upselling
• Volume discounts
• Free shipping over specified minimum purchase amount

Similar financial KPIs related to Value of New Orders and Average Order Value include:

• Value of New Balance
• Number of New Balance Transactions
• Return on Ad Spend