When the average describes nobody.
The mean is the right answer to a narrower question than most people are asking when they compute one.
- Read5 min
- Sections3
Should I use the average or the median?
Use the median whenever the distribution is skewed, which for money it almost always is. Order values, payment delays, salaries and session lengths all have a long right tail, and a single large value moves the mean far more than it moves anything a person would recognise as typical. Report both where they differ, because the gap between them is itself a finding.
01
Skew is the normal case, not the exception
Almost every quantity in a business has a floor of zero and no ceiling. Order values, invoice payment delays, time on site, salaries, donation sizes: all of them pile up near the bottom and trail off to the right.
In that shape the mean sits well above what a typical observation looks like, because it is dragged by the tail. It is not wrong, but it answers a question about the total rather than a question about a typical case, and those get conflated constantly.
A useful reflex: if a single record could move the figure by more than a few per cent, the mean is describing that record.
02
The gap between them is information
Compute both. If the mean is much higher than the median, you have a long tail worth looking at directly, because a small number of records is carrying a large share of the total.
In a customer base that usually means two distinct populations sharing one table: retail and wholesale, self-serve and enterprise. The right response is not to pick a statistic, it is to split the population and describe each.
A mean and median that agree closely tells you the opposite, and is worth knowing too: it means the average is safe to quote and one large customer is not steering your reporting.
03
When the mean is still correct
When you need the total. Average order value multiplied by order count is revenue; median order value multiplied by order count is nothing at all. If the figure will be multiplied by something, you want the mean.
When the distribution is genuinely symmetric, which does happen with measurements and rarely with money.
And when comparing like with like over time, where the same bias applies to both periods and mostly cancels — though a single unusually large order in one period will still move it, which is exactly the case where somebody reports growth that did not happen.
See it on a real project
Product A produced 68% of total growth while repeat purchasing fell from 31% to 24%.
What is making this store's growth less durable?Related
Try it on your own file.
Every check described here runs automatically, and your first findings arrive in full before you pay for any of it.
No account needed to start. You only pay when you like what you see.