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It’s a critical subset of your AOV, but instead of looking at everything, it zeroes in on what new customers are spending on their first order.
As a senior marketing professional, monitoring your nAOV gives you a clearer picture of how efficient your marketing is when it comes to growing your customer base.
Without it, you might miss inefficiencies in converting new buyers or boosting their initial spend.
Typically, new customers spend less than repeat customers.
Distinguishing AOV from nAOV matters because a lower overall AOV could actually signal that you’re bringing in more new customers.
Keeping tabs on nAOV ensures your acquisition efforts are dialed in, your targeting is spot on, and you’re setting up new customers to get more from day one.
The calculation is simple:
Take all the revenue from new customer sales and divide it by the number of orders they placed.
Done right, nAOV gives you a direct line of sight into how well your business is converting and monetizing fresh leads, which is critical for long-term growth.
There are 2 components in the nAOV formula: new-customer revenue and new-customer orders.
This metric must be sourced from the business’s backend systems, and not from platform metrics.
Ensure accurate tracking by counting only first-time transactions within a specified time period.
This is the total count of individual transactions made by new customers during the measurement period.
Each order counts as a single purchase event from a first-time customer, regardless of the number of items in the transaction.
Understanding nAOV is crucial for assessing the efficiency of customer acquisition efforts.
While a high nAOV indicates new customers are making larger initial purchases, a lower nAOV can still drive business growth by expanding the customer base.
Recognizing this distinction helps marketing leaders balance short-term revenue with long-term customer acquisition and retention strategies.
nAOV helps marketing leaders identify opportunities for upselling and cross-selling to new customers.
By analyzing the purchasing behavior of new customers, they can develop targeted strategies to increase order value through product recommendations and personalized offers.
Knowing your nAOV will give you benchmarks for tracking the performance of customer acquisition campaigns.
When you compare nAOV across different periods and campaigns, marketing leaders can see the effectiveness of acquisition strategies and make data-driven decisions to improve first-time purchase values.
Consider a company offering a fitness subscription service that sells annual memberships and equipment bundles.
In the past quarter, the company has the following data:
Using the nAOV formula:
This means the average amount spent by a new customer on their first order is $25.
Let’s say you’re the CMO and you see your overall AOV dropped from $60 to $51 last quarter.
You decide to dig deeper…
You see you still had 3,000 returning customers who spent an average of $68.
Then you bring in your nAOV calculations:
A promotional discount decreased the nAOV from $35 to $25. Yikes!
BUT…
…it brought in 2,000 new customers compared to the quarter before which only had 1,000 new customers with a nAOV of $35.
Turns out, this dip wasn’t because you’re losing high-value buyers.
It was because the recent promo brought in a flood of new customers.
These folks jumped on the lower-priced offer, so naturally, that brought your AOV down.
But here’s the kicker:
Monitoring nAOV gave you the full story.
Even though their first order was lower, these new customers are still valuable.
They’re coming in at a lower price point, but a lot of them are sticking around and making bigger purchases later.
The promo wasn’t just about landing one-time buyers; it helped you build a strong foundation of long-term customers.
Key Takeaways:
This is why nAOV matters.
It lets you figure out when to push harder on acquisition and when to optimize for bigger long-term wins.
With this data in hand, you’re making decisions based on what’s actually happening, not just surface-level numbers.
