What Is Average Purchase Value?

Average purchase value is a useful metric that tells you, on average, how much each customer spends each time they make a purchase.

Let's picture a streaming service, as an example. This streaming service only has two plans:

• $9.99/month - Gives you access to their full library, but you see ads from time to time
• $19.99/month - Gives you access to their full library with an ad-free experience

For the sake of simplicity, let's say they have 100 customers. 50 choose the $9.99 plan while the remaining 50 choose the $19.99/mo plan. Some simple math can give us the average purchase value from this dataset.

Average Purchase Value = Total Revenue / Number of Orders

So, let's find our our total revenue:

• Total revenue from the $9.99 plan = 50 * 9.99 = $499.50
• Total revenue from the $19.99 plan = 50 * 19.99 = $999.50
• Add these together and we get $1,499.00

So we have a total revenue of $1,499.00 from a total of 100 orders. Let's plug these into the equation:

APV (Average Purchase Value) = $1,499 / 100

So our APV for the month comes out to 14.99.