Do you know your average Order Value or Spend Per Sale? Or are you just guessing?
We’re all looking for success in our marketing efforts, be it traditional or online marketing. We exert a lot of effort and use all our resources to have a strong ROI (Return on Investment).
There are a lot of ways to succeed, but the one sure fire way is what I’ll share with you. It does, however, involve Math. Now before you cringe, let me add that it only needs basic mathematical knowledge, and that doing this will send your business growth into overdrive.
I have noticed that most of our new clients either don’t know or are just guessing their Average Order Value and Spend Per Sale.
Average Order Value (AOV) and Spend Per Sale (SPS) is used to determine how much a business/company can spend to acquire a new clients/customers. Knowing these values is very important because it makes sure that a business or a company does not spend more than it can afford just to get a valuable client.
If you’re now ready to know your AOV and SPS to get the edge over the competition, read along!
1. Average Order Value (AOV) – Tells you how much a customer is worth.
2. Spend Per Sale (SPS) – Tells you how much you can pay to acquire that customer.
Knowing the two values above gives you an idea about the the IMMEDIATE Average Order Value (AOV)… not Customer Lifetime Value. Of course Customer Lifetime Value has its place but this isn’t it. This is about measuring the immediate impact that your sales funnel is having on the business, because unless you’re sitting on a giant pot of cash you simply can’t afford to wait a “lifetime” to recoup your marketing costs.
Here’s the basic formula for calculating Average Order Value:
Revenue/Number of Sales = AOV
Knowing this number can help you to understand a lot of things about your business and how to achieve your growth targets.
For example, if you have a small marketing budget – perhaps we look at a strategy to increase your AOV from your existing customer base (Email, Social, Website Visitors), or if you have a large marketing budget – let’s look at investing in advertising to generate more leads. Any good business growth strategy should be doing both; the unfortunate thing is, a lot of businesses only look at one piece of the pie. Just imagine what could happen to your growth if you were to tweak BOTH pieces of the pie!
Before we continue playing with the numbers, let me make it clear that calculating your SPS may be a little more complicated to get 100% accurate. It requires some studying and looking at different AOV time lines. But don’t worry, I am serious in wanting to help you! All you need to do is book in your 1:1 Strategy Session and you too can see just how to Milk it for what’s it’s worth!
Apply here to see if you qualify and I’ll take to you soon, hopefully. (PS. Don’t worry, I won’t make you pay, this one’s on me!)