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Understanding units per transaction (UPT)
Want to learn more about your customer's purchasing behavior?
Tracking units per transaction (UPT) allows you to see the average number of units sold (products) per customer, per transaction. Or, the average number of items a customer purchases in a single transaction. Oftentimes, this metric is used in the context of retail sales.
When you want to look deeper into your sales channels and measure sales performance or determine whether or not certain marketing efforts are paying off (if you’re hitting KPIs, key performance indicators, for example), analyzing a metric like average units per transaction is a great starting point.
By looking at the data, you’ll better understand which channels, product categories, or campaigns are working successfully and which need adjustment.
How to calculate units per transaction (UPT)
Units per transaction = total units sold / total orders
*This is over a specific period of time
Example
Let’s say you run an online bookstore. In December, you had 400 transactions. From those 400 transactions, 100 total items were sold.
That means your units per transaction would be 400/100 = 4.
Takeaway
Units per transaction is like checking out books at the library for the year. You might come out two books one visit, three books another visit, and so on, but over the year, you’ll be able to take a look and track the average checkouts per month.
A metric like UPT is helpful to track for a few reasons: It gives you insight into which campaigns are effectively driving traffic to product pages and gaining sales as a result.
You see which product categories or marketing campaigns are resonating. If products aren’t selling the way you expect, this is a metric you can refer to and see how it ties back to your existing strategies or campaigns.
Just as other metrics are important to watch – customer lifetime value (CLTV) and blended customer acquisition cost (CAC), for example – units per transaction also allows you to gain deeper clarity into what customers are buying and whether or not they’re purchasing more over time. Plus, it shows you the overall health of your business.
By tracking patterns or seeing consistent (or inconsistent) behavior across the board, you can leverage that data and be more intentional with your sales process, marketing campaigns, inventory management, and future promotions, positively impacting your conversion rate and average order value (AOV).
Ready to level up your learning?
How to increase units per transaction (UPT)
Introduce bundles
An obvious way to increase the average number of items sold for your ecommerce website is to introduce bundles and add-ons. The advantage of this strategy is two-fold:
- Customers are more likely to purchase more when there are savings involved, which increases your AOV.
- Bundles allow customers to try more products, increasing the likelihood they’ll add those purchases to a shopping cart on a future visit. This also helps increase the retention rate of your retail business, too.
Nik Sharma, CEO of Sharma Brands, says it’s all about customizing landing pages to complement where customers are coming from and providing them with value.
“If someone is coming from Meta or Instagram, you can put together a product bundle that’s more in line from an average order value (AOV) and units per transaction (UPT) standpoint versus if someone comes from TikTok.”
Sharma explains that because your TikTok customers might be more interested in faster shopping experiences, directing that traffic to a landing page with a smaller bundle or more targeted product offering is more appealing.
Try Upselling and cross-selling
Cross-selling and upselling are two strategies that encourage customers to purchase from your store continuously and reduce one-off purchases or the need for discounts and markdowns to make a sale happen.
Cross-selling is putting products that complement or enhance an original purchase in front of the customer, particularly right before checkout, and increasing the average number of items customers purchase.
For example, let’s say a customer purchases a barbecue. Targeting products such as grilling accessories toward these customers is a great way to encourage them to enhance their grilling experience (and increase a sales metric such as units per transaction).
Upselling offers customers a more premium option than what they already have. This could mean encouraging customers the opportunity to upgrade with a subscription box or providing customers the ability to enhance components of their purchase.
For example, a customer might purchase a simple hamburger in-store. Still, once they see they can add bacon and avocado for an additional charge, they’ll increase the average transaction value.
Introduce a free shipping threshold
One impactful way to increase the average number of products per transaction over a specific time period is to incentivize customers with rewards when they purchase more.
Offering free shipping when you reach a certain price threshold is a popular option and encourages customers to add more items to a cart to receive free shipping.
How to use units per transaction
The best way to leverage units per transaction is to compare this metric across your different channels. This includes owned media, email marketing, and paid ads (Facebook, TikTok, Google, etc).
Looking at this metric in this context, you can see which channels are most effective at driving sales. Even further, you can compare the performance of each channel as it relates to your sales volume. You might notice that you’re selling more units through your email marketing than you are on Facebook. In this case, you might invest more money into this channel. Then, you can also leverage this data to customize your approach and encourage shoppers to stay loyal and purchase more.
Like all metrics in your ecommerce business, it’s about looking for patterns and adjusting the marketing and advertising strategy to zero in on what’s working (and adjust where changes can be made).
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