What Is Average Ticket?
Average ticket is a metric that provides details on the average amount of sales per customer. Statistically, the average ticket is the mean and is calculated by adding total sales over a specified period of time and dividing by the number of customers. It is used by a range of businesses when analyzing business performance, sales activity, and profitability.
Understanding Average Tickets
The average ticket is a business-performance metric that helps companies when analyzing sales and sales trends. It is often reported by retail companies, credit card vendors, and broker/dealers. The term "ticket" refers to a sale to a customer, but does not necessarily involve paper or cardboard slips like concert, plane, or theater tickets.
- 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.
- Home Depot, Charles Schwab, and American Express are a few examples.
The average ticket size measurement helps businesses understand sales trends and their overall profitability. Businesses will vary in the time frames 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.
Examples of Average Ticket Usage
Retail companies such as Home Depot, for example, report average ticket size metrics quarterly. In the fourth quarter of 2017, the company’s average customer ticket was $64. For the entire fiscal year 2017, the company reported average customer ticket sales of $63.06.
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 customers. For example, American Express reports one of the highest average ticket levels across the credit card industry. In 2017, the company reported average annual basic card member spending by customers 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.
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. 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.