Glossary
What is average transaction value?
Average transaction value is what a customer spends on a normal visit. It matters twice in loyalty. It tells you what a visit is worth to you. And how much it varies tells you whether stamps or points will be fairer.
Also called: ATV, Average order value.
One of the two numbers you need to price a loyalty programme, the other being gross margin.
The spread matters more than the average
A narrow spread favours stamps, which are simpler and more contagious. A wide one favours points, because under stamps a big order earns the same as a small one and your best customers quietly subsidise your smallest.
Related terms
- Gross marginThe share of a sale left after the direct cost of what you sold.
- Customer lifetime valueThe total margin a customer generates over the whole relationship.
- PointsLoyalty credit that counts the money spent, rather than the things bought.
- StampOne step towards a reward, earned by buying something the business has chosen.