Average order value (AOV)

Average order value, or AOV, is the average dollar amount a customer spends per order, calculated by dividing total revenue by the number of orders in a given period.

Expanded meaning

For a subscription commerce business, AOV tracks the average amount per subscription order, including both initial purchases and renewals. It's a simple metric on the surface, but it captures something important: whether customers are buying more per transaction over time, or less.

AOV moves for a lot of reasons: a customer adding a one-time item to their subscription order, a bundle encouraging them to add more products to their cart, or a price change on the core plan. Because of that, AOV is usually read alongside other metrics, such as total order volume and gross sales, rather than in isolation.

Why it matters

AOV is one of the more direct levers a subscription commerce business has for growing revenue without needing more customers. Increasing AOV means getting more value out of the customers a business already has, which is often more efficient than pure acquisition, since it doesn't carry the cost of winning a new customer.

Tracking AOV over time also helps a business spot problems early. A steady decline can signal that customers are downgrading, skipping add-ons, or that a merchandising or bundling strategy has stopped working, well before those trends show up in a bigger revenue number.

How to use

A typical approach to using AOV as an ongoing metric looks like this:

1. Calculate AOV for a given period by dividing total gross subscription sales by the total number of subscription orders processed in that period.

2. Track AOV over time, comparing the current period against a previous one, rather than looking at a single snapshot.

3. Break AOV down by order type, such as first orders versus recurring renewal orders, since these can move independently.

4. Test specific levers known to influence AOV, such as bundling, one-time add-ons at checkout, or mixed cart checkout that combines subscription and one-time items in a single transaction.

5. Use forecasted AOV, where available, to plan inventory, staffing, and marketing spend ahead of expected demand.

Benefits and examples

• Revenue growth without new customer acquisition: Increasing AOV grows revenue from the existing customer base, which avoids the cost of acquiring net-new customers.

• Early warning signal: A dropping AOV can flag downgrades, cart abandonment on add-ons, or a merchandising strategy that needs attention, often before it shows up in total revenue.

• Better demand planning: Forecasted AOV, combined with projected order volume, helps a business plan inventory and staffing ahead of expected demand.

• Example: bundles. A subscription box business lets customers build their own bundle from a curated set of products instead of shipping one fixed item. Customers add more to their box than they would have bought individually, which increases AOV while giving them a more personalized experience.

• Example: mixed cart checkout. A gym membership subscriber adds a one-time purchase, like a bag of protein powder, to the same checkout as their monthly membership renewal. That single combined transaction increases AOV for that order without requiring a separate purchase.

Recurly differentiators

Recurly Commerce's analytics dashboard tracks average order value alongside total gross sales and subscription orders processed, and is available to all merchants on any Recurly Commerce subscription plan. AOV in this view reflects the average dollar amount per subscription order, including initial purchases, so a merchant can monitor changes in cart size over time and compare the current period against a prior one.

Recurly Commerce's Forecasting analytics projects AOV, order volume, and gross sales up to 12 months ahead, based on current active, paused, and dunning subscriptions, which supports planning around inventory, staffing, and promotional timing. This is available to all Recurly Commerce merchants, since all Commerce merchants have the same access to all Commerce features.

Recurly Commerce also offers build-your-own bundles as a direct lever for increasing AOV: customers select from a curated set of products, using either fixed pricing (a set price regardless of contents) or flexible pricing (the sum of the individual products chosen), and can update their bundle at any time. Mixed cart checkout, which lets customers combine one-time purchases and subscription products in a single transaction, is described by Recurly as another way to drive higher AOV alongside improved customer convenience.

Frequently asked questions

How is average order value calculated? AOV is calculated by dividing total revenue for a period by the total number of orders in that same period.

Is a higher AOV always better? Generally yes, since it means customers are spending more per transaction, but it's worth checking that the increase isn't coming at the cost of order volume or customer satisfaction, such as through unwanted upsells.

What's the difference between AOV and average revenue per user (ARPU)? AOV measures the average value of a single order, while ARPU measures the average revenue generated per active customer over a period, which may include multiple orders from the same customer.

What are common ways to increase AOV for a subscription business? Bundling related products, offering one-time add-ons at checkout, mixed cart checkout for one-time and subscription items together, and tiered upsells are all common approaches.

Does AOV apply only to one-time purchases, or subscriptions too? It applies to both. For subscription commerce specifically, AOV typically includes initial subscription orders and recurring renewal orders, and businesses often track these separately since they can behave differently.