The Customer is at the Heart of the Sales Equation


If you’ve worked with me in any capacity, you know the first thing I got to is the Sales Equation; it is my go-to for understanding what is happening in a business. I’ll admit, it’s easy to get caught up in the metrics like sessions, conversion rate, and average order value (AOV) as they are crucial to measuring business performance. But at the core of these metrics is the customer—the driving force behind every successful transaction.

Breaking Down the Sales Equation

The formula for revenue is simple:

Sessions × Conversion Rate × AOV = Revenue

Each of these variables represents an essential step in the customer journey. Let’s break them down and explore how the customer fits into each piece of the equation.

1. Sessions: Attracting the Right Audience. Sessions represent the number of visits who land on your website or walk into your store. The key to increasing sessions isn’t just about driving more traffic—it’s about attracting the right customers. Understanding your target audience’s needs, behaviors, and pain points ensures that the people coming to you are more likely to engage and buy.

  • Are you reaching your ideal customers through the right marketing channels?
  • Is your messaging resonating with them?
  • Are you providing value from the first touchpoint?
  • How well do you actually know your target customer?

2. Conversion Rate: Turning Interest into Action. Getting customers to your site is just the first step; the next challenge is converting them. Your conversion rate reflects how well you persuade potential buyers to take action—whether it’s making a purchase, signing up for a service, or scheduling a consultation.

Conversion rates are often impacted by some of these points:

  • User experience: Is your website easy to navigate?
  • Trust factors: Do customers feel confident in your brand?
  • Clear calls-to-action: Are you making it easy for them to take the next step?
  • Do you have appropriate inventory?
  • Is there value and differentiation in what you’re selling?

Optimizing some of these elements ensures that more of the right customers move from browsing to buying.

3. AOV: Enhancing the Customer’s Purchase Experience. Average Order Value (AOV) measures how much a customer spends per transaction. Rather than focusing solely on increasing prices, businesses should look at how they can enhance value for the customer. This comes to fruition in one of two ways: UPTs (Units per Transaction) or AUR (Average Unit Retail).

Some strategies include:

  • Bundling complementary products
  • Offering upsells or premium versions
  • Providing incentives for larger purchases
  • Offering a promotion that incentivizes buying multiple units
  • Higher free shipping threshold (caution on negatively impacting conversion rate)

When done right, increasing AOV isn’t just about driving revenue—it’s about ensuring customers get the best possible experience and value from their purchase.

Why the Customer is the Key to Sales Growth

While the equation provides a structured way to look at what elements are driving revenue, it’s important to remember that numbers alone don’t drive sales—people do. By focusing on what the customer wants/needs, providing value in the products/services you are selling, and creating a seamless customer experience at every touchpoint, the business can much more naturally improve sessions, conversion rates, and AOV, all leading to sustainable revenue growth.

When you shift your mindset from chasing numbers to serving customers, the numbers take care of themselves. This is a big statement, I know. But, I have seen it work in many of the businesses I’ve been a part of.