Average order value
Average order value, or AOV, is the average amount a client pays per order or deal over a period: total revenue divided by the number of paid orders.
How it is calculated
Average order value = revenue for the period / number of paid orders. If a team closed 50 deals for a total of 25,000 in a month, the AOV is 500. The figures are illustrative.
It can be calculated for the whole company, for each rep, product, channel or client segment. Each cut answers a different question.
Why it matters
Revenue has three levers: the number of clients, how often they buy and how much they pay each time. AOV is the third lever. Raising it by a modest amount across all deals can matter as much as finding many new leads.
It also helps with planning. Knowing AOV and conversion, a head of sales can work backwards from a revenue target to the number of deals and leads required.
Typical mistake
Trusting the average alone. A few very large deals can lift AOV while most orders get smaller. Look at the median and the spread as well.
Another mistake is pushing AOV up at any cost. Reps start overselling, discounts shrink to zero, and conversion drops because clients who wanted a smaller purchase leave. The amount per order rises, total revenue does not.
What to do
Track AOV together with conversion and number of orders, never in isolation. Compare it by rep and segment to find where it grows naturally through upsell and cross-sell. If AOV and conversion move in opposite directions, look at what changed in the conversations.
More in Signals
- Sales team motivation: what to pay for when sales happen in chatSales motivation works when the variable pay is tied to money actually paid, not to activity: message counts and time online are easy to inflate. You need a clear formula, a fair way of assigning clients and every rep seeing their own results. Non-cash motivation in chat means recognizing specific conversations, not saying generic words.
- What a messenger sales team really costs and where it loses moneyA sales team in messengers costs more than salaries: money also leaks out through seven channels. These are slow replies, abandoned conversations, forgotten follow-ups, a sales rep leaving with the client base, blocked numbers, broadcasts with no result and broken payment promises. Each leak can be sized on your own numbers: lost conversations times your close rate times your average deal.