Glossary
Learn how to calculate annual order value and why it matters. Understand AOV's role in forecasting revenue, targeting high-value customers, and improving ROI.
1
min read
Annual order value is the total revenue a single customer is expected to generate over a twelve-month period. It’s calculated using the formula:
Annual Order Value = Average Order Value × Purchase Frequency Per Year
For example, if your average order value (AOV) is $50 and the average customer makes five purchases per year, the annual order value would be $250. This metric helps marketers estimate how much revenue a typical customer contributes annually, which is critical when evaluating acquisition costs or optimizing media budgets.
Why Annual Order Value Matters
Understanding annual order value (AOV) allows advertisers to move beyond one-time conversions and focus on long-term revenue impact. It can guide smarter campaign planning by helping you identify high-value customer segments, refine retargeting strategies, and invest in the channels that drive repeat business. For experienced marketers and agencies, this metric supports better forecasting, stronger ROI models, and more accountable media performance.
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