What if you could take your current clientele and make 30-50% more, without having to drive new business? Getting new clients is always a nice thing. Sometimes, the only option is to work with those you have. We wanted to share how Average Order Value is a metric that you should be watching in your business and actively working to increase.

What is Average Order Value (AOV)?

This is a very powerful metric that allows us to understand a complicated part of our business in a really simple way. It is the average amount of money we make per appointment, over some period of time. Even though we sell “Services/Appointments” not “Products/Orders” it is still called AOV. Simple right?

How to calculate your Average Order Value(AOV)?

In order to calculate your AOV you need to know these things:

How many services have you performed over the period of time?

How much revenue you have made over that same period of time?

I provided an example equation you can use to calculate your own AOV.

For example: Let’s say over the last 12 months you have had:

• 1144 appointments.
• $60,000 (revenue).

AOV Formula (revenue per service):

$60,000 (revenue) / 1144 (# of appointments) = $52 Average Order Value (AOV)

Why is knowing your AOV important:

Focusing on your current client base is the cheapest and easiest way to increase your revenue. You still should be marketing your services to new clients, but why not increase the revenue stream you have available now? 

Increasing AOV through Retail

 If you could sell an average of 1 retail product with a value of $20 at every appointment, it would increase your (AOV) to $70. Then you can take your new AOV and plug it into the formula above to see the overall effect on your business.

Revenue after the Upsell:

$70 (AOV) x 1144 (# of appointments) = $22,880 (revenue)

That's a 38% increase in revenue from adding on just 1 product!

Increasing AOV through Upselling services

Outside of retail, you can also increase your AOV by upselling during the service. Upselling means enhancing or upgrading your client’s service. Some examples of this:

• If a client comes in for a facial offer a brow wax for a small percentage off.
• If a client comes in for a lip wax ask if they would like an eyebrow, chin, etc wax while they are there.
• Offer an ingrown treatment for $25 in service and send them home with a product

These small services are quick to add on to any service but can result in a larger bill at check out, very similar to the retail products.

Increasing AOV through Bundling

Another opportunity to increase your average order value in your spa or studio is through bundling. Take your two most popular services and one of your most popular products, bundle them together, and give a discount. There will often be opportunities as you are chatting with incoming clients to ask a question or two, then offer a related bundle.

For example, offer a full leg, combined with a bikini, underarm, and an ingrown treatment. The value of this may be $140, but it makes sense to offer all of them together at $99. Offer it and see if the client expresses interest. This makes sense because you have upsold the client from $45 for the full leg to all three for an additional $54.

Summary

I really hope this helps you dive into what your sales are and how you can easily increase your average order value. In summary, retail, upselling, and bundling are three different ways that you can leverage sales techniques within your spa or studio to drive additional revenue on every service! If you are looking for some products to retail check out some of our top-selling retail products.