What is SaaS Total Order Value (TOV)?

The Total Order Value (TOV) in SaaS represents the total revenue generated from a single customer order over a specific period, often the lifetime of the subscription. It includes any one-time payments like setup or expert services, ongoing subscription fees, and any upsells or add-ons purchased at the start of the subscription. A key performance indicator (KPI) essential for accurate revenue forecasting and business valuation, TOV offers a thorough understanding of a customer order’s value.

The overall revenue throughout the subscription period, including any upfront one-time payments, is TOV. TOV provides a more accurate indicator of total order revenue than Annual Recurring Revenue (ARR) or Monthly Recurring Revenue (MRR), especially when significant marketing and sales expenses are incurred during customer acquisition.

To calculate your company’s TOV for a specific customer order, you can use this formula:

Total Order Value (TOV) = (Recurring Subscription Fees x Subscription Duration) + One-time Fees + Value of Add-ons

示例：

Imagine you’re a SaaS business and a customer purchases an annual subscription for $1200, a one-time setup fee of $300, and an add-on feature worth $500.

To calculate the TOV for this order:

TOV = ($1200/year x 1 year) + $300 + $500 = $2000

Therefore, the Total Order Value for this customer order is $2000.

Total Order Value (TOV) looks at the total revenue generated from a single customer order, whereas Average Order Value (AOV) determines the average value of individual orders across all customers. This distinction is crucial for SaaS organizations because it offers insights into overall income production beyond the average transaction value.

Businesses can more effectively assess 定价策略, create growth initiatives, and examine client acquisition expenses by having a better understanding of TOV. AOV alone may not provide a clear picture of a SaaS company’s financial health since it only highlights the average transaction rather than the total revenue generated from individual orders.

Despite their apparent similarity, TOV and 总合同价值 have different applications. The total value of a signed contract is captured by TCV, which includes all possible income from 追加销售 or add-ons throughout the entire contract term, as well as upfront payments and ongoing fees.

Conversely, TOV only considers the purchase price at the outset, which is the agreed-upon revenue for the initial period of the contract, including any add-ons purchased at the start.

Also, while TOV concentrates on the initial commitment, TCV frequently includes the contract’s total value over its whole term, including any prospective renewals.

Understanding the customer’s lifetime value and making accurate revenue forecasts depend on this distinction.