Using Average Ticket Size to Grow Your Business

Understanding whether your business is profitable is key to making sure you’re building and maintaining a healthy, long-lasting business. Using key metrics – like average ticket size – helps you measure the health of your business so you can make changes as early and as often as necessary for growth.

What is Average Ticket Size?

Your average ticket size tells you the average amount of revenue you receive on each transaction. If your business had 100% unique customers, it would be the amount each customer spends with you.

As you set monthly revenue goals, you can use your average ticket size to come up with ways to meet those goals. That may mean attracting more customers or getting customers to spend more money on each transaction.

Here’s how to calculate your average ticket size:

1. Start with the total amount of revenue received last month.

2. Divide by the total number of transactions made last month.

The result gives you the average ticket size for your business. Pretty simple, right?

You can calculate average ticket size over any period of time – weekly, monthly, quarterly, or annually. Just make sure you use the same time period for both your revenue and number of transactions.

Here’s an example.

Let’s say you had these results for the month of March:
Total amount received: $46,071
Total number of transactions: 1,901
Average ticket size: $46,071 / 1,901 =  $24.24

This means you received an average of $24.24 each transaction in March.

Once you’ve calculated your average ticket size, you can quickly tell how your revenue is trending compared to the previous time period by noting whether transactions are higher or lower than the average ticket size.

Using Average Ticket Size to Set and Track Business Goals

Say your goal is to increase monthly revenue by 20% to $55,285. You would need increase your number of transactions to 2,280 – assuming the average ticket size remained the same. Increasing your number of transactions may mean launching a marketing campaign to attract new customers to your business. Or, it could mean offering a loyalty program to encourage existing customers to make repeat visits.

Another strategy for reaching your revenue goal may be increasing the average ticket size. Assuming you had the same number of visits, you’d need to increase the average transaction size to $29.08 to meet the revenue goal in the example above. Raising prices is one way to do this, but isn’t always the best strategy since customers may not respond well to higher prices. You can encourage each customer to spend more by training staff to upsell or by placing impulse buys near the checkout.

Clover customers can pull the data to calculate average ticket size from Reports. Alternatively, customers can use the Clover Insights App to automatically calculate average ticket size. The app gives you the added benefit of comparing the average ticket size of your business to local competitors or similar businesses in other cities to gauge how your business is doing in comparison.


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