What Is Average Ticket?
Average ticket is a metric that provides details on the average amount spent per customer per visit. Statistically, the average ticket is computed as the mean of your sales per visit and is calculated by adding total sales over a specified period and dividing by the number of visits with purchases.
It is used by many businesses when analyzing business performance, sales activity, and profitability.
Key Takeaways
- Average ticket size is a measurement that looks at the dollar amount of sales per customer.
- Computing average ticket size is computing the mean, which is calculated as the total sales divided by the number of customers.
- Many companies use average ticket calculations in their sales and profitability analysis.
- Brokerage firms, credit card vendors, and retailers often track the average ticket size measurement.
Understanding Average Tickets
The average ticket is a business-performance metric that helps companies analyze sales and trends. It is often reported by retail companies, credit card vendors, and brokers/dealers. The term "ticket" refers to a customer's purchase in one visit but does not necessarily involve paper or cardboard slips like concert, plane, or theater tickets.
The average ticket size measurement helps businesses understand sales trends and their overall profitability. Companies vary in the time frames they use for calculating average ticket sales. Generally, other statistics around the average ticket value are also reported to help provide a range, such as the lowest ticket, highest ticket, and median ticket.
Average ticket size is an excellent way to gauge the effectiveness of marketing campaigns.
Calculating Average Ticket Size
To calculate average ticket size, you need to know your total sales for the period you're evaluating. Once you gather that information, you divide it by the number of sales made in the same period. The formula might look like this:
Average Ticket Size = Total Sales (in dollars) ÷ Number of Sales
So, if your net sales for the month was $50,000 and you had 1,000 customers checkout, you had an average ticket size of $50.
Examples of Average Ticket Size
Retail companies like Home Depot report average ticket size metrics in their financial disclosures. For example, the company’s average customer ticket was $83.04 in 2021, up from $74.32 in 2020.
Credit card businesses also follow average tickets when analyzing credit card transactions by customers. A credit card company’s average ticket refers to the average amount charged on credit by customers.
For example, American Express reports one of the highest average ticket levels across the credit card industry. In 2021, the company reported average annual basic card member spending by customers globally of $20,392. The average fee per card is also another closely followed metric for credit card companies. In 2021, American Express reported an average fee per card of $74.
Broker/dealers calculate average ticket size when analyzing trade data by customer. Broker/dealers will often follow average ticket size per client on a daily basis, reporting average trades in dollar amounts per day. For example, in 2021, Charles Schwab reported their daily average revenue per trade was $2.54, up from $2.16 a year earlier.
Generally, broker/dealers only operate on business days, which gives them fewer active days for calculating transactions and revenue than other retail businesses.
How Do You Calculate Average Ticket Size in Square?
You add up the value of your total daily sales and divide it by the total number of sales for the day (or period).
What Does Average Ticket Size Mean?
Average ticket size is the average price paid per customer at checkout in one visit.
What Is Ticket Size in Sales?
Ticket size is the total amount a customer spent in one visit.
The Bottom Line
Average ticket size measures how much customers spend per visit on average. It is used by businesses to analyze profitability and sales.
One of the most helpful ways to use average ticket sales is as a measurement to see whether the measures you're taking to increase sales are working. For instance, if you decided to offer discounts to increase sales, you might see your average ticket size rise if your loyal customers began to purchase more per visit.
