What is Average Ticket?
Average ticket is a metric that provides details on the average amount of sales by a given customer. It is used by a range of businesses when analyzing business performance and sales activity.
Understanding Average Ticket
Average ticket calculations are a business performance metric that helps companies when analyzing sales and sales trends. Average ticket is often reported by retail companies, credit card vendors and broker/dealers.
To calculate an average ticket, sales amounts are totaled over a specified period of time and divided by the number of customers. The measurement of an average ticket size helps businesses understand their overall profitability. Businesses will vary in the timeframes they use for calculating average ticket sales. Generally, other statistics around the average ticket are also reported to help provide a range such as the lowest ticket, highest ticket, and median ticket.
A wide range of companies use average ticket calculations in their sales and profitability analysis.
Retail companies such as Home Depot report average ticket measures quarterly. In the fourth quarter of 2017, the company’s average customer ticket was $64. In fiscal year 2017, the company reported average customer ticket sales of $63.06.
Examples of Average Ticket Usage
Credit Card Companies
Credit card businesses follow average ticket when analyzing credit card transactions by customer. A credit card company’s average ticket refers to the average amount charged on credit by a customer. American Express reports one of the highest average ticket levels across the credit card industry. In 2017 the company reported average annual basic cardmember spending by customer globally of $18,519. Average fee per card is also another closely followed metric for credit card companies. In 2017, American Express reported an average fee per card of $49.
Brokers and Dealers
Broker/dealers also calculate average ticket size when analyzing trade data by customer. Broker/dealers will often follow average ticket size on a daily basis reporting their clients’ average trades in dollar amounts per day. In 2017 Charles Schwab reported a daily average trade amount by client of $608,800. For Charles Schwab, this translated to daily average revenue from trades of $321,300.
Revenue for individual trades can vary across products at broker/dealers with trades at Charles Schwab ranging from $8.95 to $4.95 for standard trading products and $0.75 to $0.65 for options. In 2017, Charles Schwab reported that their daily average revenue per trade was calculated at $8.20. Generally, broker/dealers only operate on business days which gives them fewer active days for calculating transactions and revenue than other retail businesses.