Why Average Order Value May Be Overrated

This episode dives into this week's intriguing news story: the surging demand for prime office spaces. Big businesses are now looking up to six years in advance to secure premium office locations. Claire and Simon dissect the reasons behind this trend, including energy efficiency regulations and the competitive labour market, which is driving companies to invest in high-quality office environments to attract and retain talent.

The main segment of the episode challenges conventional wisdom about the average order value (AOV). Claire argues that while AOV is a crucial metric for many businesses, it may not be as relevant for service-based businesses or those with fewer, higher-value transactions. She discusses the limitations of AOV and offers alternative KPIs that might be more beneficial for different business models. Key points include the relevance of monthly recurring revenue, customer lifetime value, and other metrics that better align with the specific needs of various types of businesses.

Finally, the episode wraps up with a "Profit Cash Growth Extra" segment where Claire shares a small but impactful tech tip: connecting your bank to your Apple Wallet to display real-time balances on your credit and debit cards. This feature can be particularly useful for business owners who want to keep a close eye on their finances without switching between multiple banking apps.

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ABOUT THE HOST:

Claire Hancott through Profit Cash Growth helps 6 & 7 figure business owners to increase their profit, improve their cashflow and grow their business using their numbers.

As a finance director & chartered management accountant, Claire has nearly 20 years’ experience in finance and running businesses of her own. This gives her a unique insight into the information and support business owners need to grow a financially successful business.

Claire passionately believes that every business should be run by the numbers because the numbers in your business are telling you a story about what is and isn’t working and where your opportunities lie. Claire’s mission is to provide insightful management accounts, reports and advice to business owners and support them to make smarter decisions.