Average Selling Price (ASP)

The term ASP tends to be used more for moderate to high volume businesses, such as retail, food services, and technology, but its use is seen in almost every type of business.

ASP can be a good indication of the effectiveness of a company’s sales team, the company’s position in the market, and how much the market has been commoditized. Unlike other revenue related metrics, ASP is highly visible to customers and needs to be understood and leveraged by both marketing and sales. It can be an effective way for sales executives to compare how different parts of their team are performing. ASP can vary significantly between companies and segments (such as target users and geography).

For SaaS companies, ASP is the average price a new customer pays when they first subscribe to the service. This is often referred to as average revenue per new account and is a segment of ARPA.

Average Selling Price is an excellent support metric for Average Order Value (AOV) as it can provide context behind why AOV is either increasing or decreasing. Moreover, utilizing ASP in tandem with Average Basket Size (ABS) provides an even greater context to changes in AOV.