True Average Order Value (True AOV)

Overview

True Average Order Value (True AOV) is the average order value (minus shipping and taxes) for orders with a positive revenue.

πŸ“˜

True AOV = (Positive Order Revenue - Shipping Price - Taxes) / Orders Count

The calculation is based on data from the Orders table.

Insights and Actions

True Average Order Value (True AOV) offers a refined look at the revenue generated per order, accounting only for profitable transactions. Efficiently leveraging True AOV data can guide strategic business decisions:

  • Optimize Pricing Strategies: Analyze True AOV alongside customer feedback and market trends to adjust pricing, ensuring it aligns with value perception and demand.
  • Tailor Marketing and Promotions: Develop targeted promotions that encourage higher-value purchases, focusing on products or bundles that can boost True AOV.
  • Enhance Product Mix: Identify which products or categories contribute most to True AOV and consider expanding these lines or featuring them more prominently in marketing efforts.
  • Improve Customer Segmentation: Use True AOV to segment customers based on their spending behavior, customizing marketing messages to encourage repeat high-value purchases.

Example Use

Prompt

What's my true AOV over the last 90 days?

Response

Query

SELECT
  COALESCE(
    SUM(od.order_revenue - od.shipping_price - od.taxes) / NULLIF(
      COUNT(
        CASE
          WHEN od.order_revenue > 0 THEN 1
        END
      ),
      0
    ),
    0
  ) AS true_aov
FROM
  orders_table AS od
WHERE
  od.platform IN ('stripe', 'shopify', 'amazon')
  AND od.event_date BETWEEN DATE_SUB(CURRENT_DATE(), INTERVAL 90 DAY) AND DATE_SUB(CURRENT_DATE(), INTERVAL 1 DAY)
ORDER BY
  true_aov DESC;