Average Order Value (AOV) tracks the average dollar amount spent each time a customer places an order on a website or app. For e-commerce and retail businesses, AOV is one of the three core growth levers (alongside traffic and conversion rate). It is calculated by dividing total revenue by the total number of orders. Increasing AOV is a powerful way to grow revenue without spending more on acquisition; if you can get each customer to spend $60 instead of $50, you've increased your revenue by 20% at near-zero incremental cost. Standard strategies for boosting AOV include product bundling, upselling at checkout, and offering 'Free Shipping' at a specific price threshold. AOV is also a critical input for calculating LTV and determining the maximum CPA a business can afford. Businesses with high AOV have more 'Margin for Error' in their marketing spend, allowing them to outbid competitors for premium ad placements.