In the environment of online marketing and sales there are fundamental metrics that must be optimized to increase conversions, the average ticket value per order, the frequency of purchase, and the customer retention period are the main among multiple indicators to monitor, depending on of the objectives of each business.
Under this vision, the average ticket is absolutely important, but it is worth noting that this metric is only part of the general picture, to draw a successful online sales strategy.
What is the average ticket?
The average ticket is the average amount that a customer spends when purchasing your products or services. This value can vary drastically between different markets, periods of time, or even between different branches or offline points of sale in the same city.
Given this, it is important to formulate your own KPIs or custom indicators for each point of sale, based on a combination of competitor data, specific market benchmarks, and of course, your own sales history.
In turn, the average ticket is a relatively simple metric to calculate. You just need to take the total revenue during a given period and divide it by the number of orders placed during that same period.
If, for example, a store has generated $ 5,000 of revenue in the previous month, and there were 100 orders, the average ticket calculates by dividing $ 5,000 by 100 to give a figure of $ 50.
Increasing the value of the average ticket translates into driving customers to buy more products or items that cost more.
And techniques such as upselling, cross-selling, and customer retention are excellent actions to optimize this indicator.
Factors to define the average ticket per customer
As we clarified at the beginning, KPIs are the most relevant and valuable metrics for your business. There are common indicators across all industries, but each company has unique KPIs to regularly track and analyze each organization’s service or customer engagement.
Once you identify which metrics are most relevant to your industry, add them to your KPI list for regular monitoring.
To facilitate learning, we will detail the most common, but also the most relevant KPIs for any sector.
1. Conversion rate
The conversion rate is the number of customers who complete a sale after visiting your website and viewing a product of interest to them. This rate is closely tied to overall revenue metrics.
Its importance derives since it represents actual sales compared to the number of customers who see your products.
This KPI can also be compared to other metrics designed to improve conversions, such as overall page views, average order values, and traffic sources to gain more insight into the behavior of your users who complete the purchase.
2. Gross margin
The gross margin is the actual profit you get, subtracting the cost of production and marketing cost of the goods offered. This is essentially the profit of the product after the sale.
Knowing how much your business earns from each sale is extremely important to ensure that it is growing and scaling properly.
3. Average value of the abandoned order
Tracking the average value of an abandoned order allows you to identify the average value of an order that is abandoned during the purchase stages.
It can also be measured in a general way and segmented by type of device, platforms, and traffic sources.
4. Cost per acquisition
Cost per acquisition is how much it costs to win a new customer. This will include advertising costs, email marketing campaigns, discounts offered, and whatever else is required to finalize the sale.
This indicator is also essential for analyzing the average ticket since it gives us an idea of how much effort and money it takes to really get a customer that generates income.
Profitable Growth Strategies to increase the average ticket
To develop strategic actions that promote the possibility of increasing the average ticket, there are various tactics that serve to boost the aforementioned indicators, among many others that are part of the goals of your company. Let us know the following:
1. Invest in your most successful channel
Check the numbers and statistics for your last period. How many sales have you made through each of their campaigns? What marketing efforts and through which channels have the most sales been driven in that period?
Once these basic values have been identified, we can investigate which were the products with the highest value they sell given within these campaigns.
Once you’ve identified your highest performing promotional channel, it’s time to think creatively. How can you use that channel to its full potential?
If investing in more advertising is not an option, you can invest more time, resources, or promotions that drive the sales of strategic products or services that increase the value of the average ticket.
2. Increase prices
Nobody loves price increases, but inflation and the increase in the value of your products or services is a reality. Most loyal customers will understand and want to support your company.
You can spend some of your new income on marketing and improving product quality, turning the shopping experience into a premium service that justifies the additional cost.
3. Focus on a new audience
A classic way to even double the average ticket is to find a direct way to attract a new audience but related to the solutions that your brand offers.
To reach this new target audience, select some new marketing channels, and monitor how they work. Then, choose the platform with the best ROI, focus resources on optimizing results.
Managing a diverse range of products and services with different values and prices can represent a challenge when it comes to increasing the profitability of the company since multiple indicators influence the profits that we obtain as a result of each of the strategies.
By monitoring the value of the average ticket, we obtain a global understanding of the income that each client brings, but to raise this metric it is necessary to strengthen the tactics of both the marketing and sales departments together.
These efforts not only increase the company’s income but will optimize the results of various areas, generating much more productive and efficient actions.