Ecommerce
Average order value
Also called AOV.
Average order value is mean revenue per transaction. It shows how much a typical order is worth, not how many orders there are.
How it is measured
Divide revenue by the number of transactions over the same period and the same currency. Decide whether revenue is before or after refunds, tax and shipping.
In Tarsier you send order value as part of a purchase event and divide totals yourself, since the dashboard counts events.
Worked example
A tea shop has 240 orders and 9,120 in revenue in a month, so AOV is 38. A new free-shipping threshold at 45 pushes 50 customers to add a tin. Orders stay at 240 and AOV rises to 41.
A look at the distribution shows most orders sit at 22 to 30 and a handful of 200 wholesale orders drag the mean up.
How it differs
Average order value is revenue over orders. Revenue is the total. A transaction is the unit. Refund reduces the numerator. AOV rises with bigger baskets, not with more shoppers.
Common errors
Mixing currencies. Letting a few large orders skew the mean. Counting shipping inconsistently. Ignoring refunds. Optimising AOV and hurting conversion.
In practice
Report the median beside the mean and check what happens to conversion when AOV rises.