What Is Average Transaction Value (ATV) and How to Increase It
Published date: 01.07.2025
Running an online product or service takes a lot of effort and attention to detail. It requires familiarising yourself with key terminology to ensure that your business is operating at optimal levels.
One term that crops up quite often but is frequently misunderstood is average transaction value (ATV) or average value per transaction.
But what does this mean for business owners? How can you monitor and measure it? Why is it important? And how can you improve your metrics and performance?
This article answers these questions to help your business grow. Let’s take a closer look.
Defining Average Transaction Value (ATV) in Retail and Services and How to Calculate It
Regardless of whether you run a retail (product) or service business, and irrespective of whether it’s online or at a brick and mortar location, ATV is a critical metric to monitor.
The average transaction value formula in retail is simply a calculation that looks at the average value of each transaction made by a single customer at your store. Wondering how to calculate average transaction value?
The formula is as follows:
ATV = Total revenue value over a specific period / Total number of transactions
To break this down, here’s a simple example:
Say that you sell £10,000 worth of products or services in the space of one month. You’ve had around 35 transactions over the entire period. To calculate ATV, you’ll want to take your total revenue for the period, which is £10,000, and divide it by 35. The total or average transaction value is £285.73.
It’s important to note at this point that an ATV figure will not give you immediate insights into your pricing or product strategy or return on investment (ROI). The reason behind this is that your ATV will need to be classified as either high or low.
High ATV signals that your products are optimally priced and that your ROI is healthy. The opposite is also true. Low ATV means that your product or service pricing could be improved as you are not yet making the most out of your sales.
Why ATV Matters for UK Businesses
Having looked at the definition and formula of ATV, it’s important to also look at why average transaction value is important for your UK business. This metric is a great indicator of where your business stands from a financial point of view based on your pricing and total number of sales.
As mentioned earlier, your ATV can be either high or low. Aiming for and having a high ATV are clear indicators that your pricing and sales strategy is working. It also means you are getting strong returns on your investment.
Furthermore, your ATV as a key performance indicator (KPI) for your business will show you if and where to make improvements. Additionally, it will provide you with insights to strengthen your customer service or product offering.
And to top it all, your ATV matters because it can improve your overall business performance.
With a clear figure at your disposal, you will be empowered to make strategic decisions that impact the future success of your business by taking small steps now that help improve financial health and liquidity.
What Key Factors Influence The ATV
On the surface, ATV consists of two financial performance criteria, which, when divided by each other, give you a total figure. However, that figure alone isn’t sufficient to help you determine your business’ financial performance.
ATV is influenced by many factors, which include:
- How much you spend to acquire a customer;
- Your return on investment;
- Your pricing strategy (including shipping, add-ons, bundles, etc.);
- Your marketing strategy (including discounts for larger purchases or specific sales you’re running);
- Your sales strategy (underpriced vs. overpriced products and a golden medium);
- The impact of promotions on your revenue.
Overall, an ATV figure doesn’t mean much on its own. But when put against these key factors, it’s a highly important metric that allows you to measure success and performance while enabling you to make key strategic decisions to improve business health.
How To Use Your POS Data to Monitor and Improve ATV
If you want to know how to increase average transaction value in retail, this section looks at a few tactics and techniques that work. Let’s look at each one in more detail.
Upselling and cross-selling techniques that work
Upselling and cross-selling techniques are strategies that encourage customers to either purchase related products to the one they have selected or to purchase higher-value items.
For these methods to be effective, you need to promote related and higher price point products and make sure they are visible and attractive. You’ll also want to train your team to bring these options to the attention of your customers.
Product bundling and promotions to boost basket size
Boosting a customer’s basket size means encouraging them to spend more at your store. The more they spend, the higher your revenue and ROI and consequently, the higher your ATV.
One method to achieve this is to bundle similar products together and offer them as a single offering. In your customer’s eyes, this will look like paying less for more items, and as such, it is viewed as value for money.
From a business perspective, it’s a chance to increase your basket size and ATV, as a key performance metric.
Staff training for higher-value sales
We alluded to training your staff to encourage higher-value sales. And this warrants its own discussion.
Ensuring that your team is well-versed in your product offerings and that they are capable of promoting additional product sales or promoting higher-value sales is key to achieving the goal of higher ATV.
That’s why you need to invest time and effort into training your team to offer as much as possible.
Manage and adjust your shipping thresholds for every sale
If you run an online store and sell tangible products, you know that the shipping price is a highly influential factor from a customer’s perspective that can drive a sale or lead to its rejection.
That’s where adjustable shipping pricing needs to come in. Every sale should have a dynamic field for shipping, which is adjusted based on the value of the purchase.
To encourage higher-value sales, be sure to offer lower shipping pricing for higher ATV sales. This way, you encourage more spending at your store while offering attractive shipping prices.
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Introduce a loyalty programme
Loyalty programmes are a method that aims to have customers return to your store again and again. Naturally, returning customers are a gem for businesses and it’s something you need to encourage. It’s not only a great way to reduce your customer acquisition costs (CAC) but is also a key way of offering value and quality.
When you have returning customers through a loyalty programme, you keep them for longer. Keeping customers for longer periods of time means the chance of more sales and, therefore, reaching a higher ATV.
Leverage payment flexibility to encourage bigger purchases
Last but not least, you can also leverage payment flexibility to encourage bigger purchases. One of the greatest challenges for most customers who shop online is that their preferred payment methods aren’t available or easily accessible.
This can immediately stop a customer in their tracks and prevent them from reaching the checkout phase of the purchase process. Losing customers at checkout is something no business can afford.
That’s why offering a multitude of payment options and greater payment flexibility can speed up the checkout process, reduce customer frustration, encourage bigger purchases, and thus, improve your ATV.
How myPOS Solutions Help Track and Grow ATV
At the end of the day, payment flexibility and variety is the name of the game. When your customers are able to enjoy a smooth checkout experience, they’re more likely to keep coming back for more as your products or services add necessary value and reduce frustration.
As a merchant, you need a partner that empowers you to track your payments quickly, easily and a click of a button. That’s where myPOS comes in with fast and immediate dashboards that factor in every sale as it happens.
With the ability to easily analyse your financial and sales data and performance through your myPOS business account, you can now make calculated business decisions that help your business grow.
Conclusion
Understanding and optimising your ATV is essential for driving business growth and profitability. Regardless of whether you run a retail or service-based operation, ATV offers valuable insight into customer spending habits and sales performance.
By implementing strategies such as upselling, product bundling, staff training, flexible payments and loyalty programmes, you can effectively boost your ATV and overall revenue.
Plus, partnering with the right payment service provider like myPOS further supports your growth by helping you track and analyse transactions in real time in addition to allowing you to accept multiple payments with instant settlement of funds.
With a focused approach and the right support, improving your ATV can lead to smarter decision-making and long-term success for your business.
Frequently Asked Questions
What is the GTV transaction value?
GTV stands for gross transaction value, which refers to the total monetary value of all transactions processed through your business over a given period. Unlike revenue, GTV includes the full value of all sales, including taxes, shipping, and any third-party fees, before deductions. It’s often used in e-commerce and marketplace settings to assess the total sales volume a platform facilitates. GTV provides a broad overview of your sales activity and helps you track performance.
What is the average transaction value KPI?
Average transaction value is a KPI that measures the average amount a customer spends per transaction. It’s calculated by dividing total revenue over a specific period by the number of transactions. This KPI helps businesses understand purchasing patterns and evaluate the effectiveness of pricing, promotions and sales strategies. A rising or high ATV indicates customers are spending more per visit, which may suggest effective upselling or bundling tactics, while a low ATV could signal opportunities for improvement.
What can average transaction value (ATV) tell me about my business?
ATV can provide important insights into how much your customers typically spend in a single purchase. It helps you assess the financial efficiency of your sales process and the success of your pricing and promotional strategies. A high ATV might suggest effective upselling, strong product bundling or high-value offerings, while a low ATV could indicate underpricing or missed opportunities to increase basket size. Monitoring ATV over time can help identify trends and inform smarter business decisions to drive growth.
