By
Acquiring more new customers is what most business owners focus on, and they end up missing out on huge opportunities which can save them money and increase their profit. One of these opportunities is squeezing more money out of the same order. Think about it like this; you created a marketing campaign and got your website traffic of 1000 users. Out of those prospects, 100 converted into paying customers. However, the 100 customers ended up paying $2500 with an average of $25/order.
Instead of investing more money in marketing to acquire more customers and get more revenue. You can get those 100 customers to pay $50/order and double your revenue with no extra marketing costs! This is done by increasing the Average Order Value (AOV). Read on to learn what is Average Order Value (AOV) and how to improve it to boost your revenue.
What is Average Order Value (AOV)?
Average order value (or AOV) is an essential eCommerce metric that gauges the average amount of money spent per order in a defined timeframe.
Average order value (AOV) Formula
To calculate Average order value (AOV), Divide your total revenue, in a certain time frame, by the total number of orders within the same timeframe.
Average order value formula = Total Revenue / Total Number of Orders
For example, in September, you generated $10000 in total revenue, and 200 orders were created on your online store. Then your average order value will be: $10000/200 = $50
This means a customer spends $50 on average for each purchase made on your online store.
19 Effective Ways to Increase Your Average Order Value (AOV)
1- Create an order minimum for “free shipping”
Study your current average order value and make the free shipping threshold after a 30% increase. For example, if the average order value is $35, offer free shipping after hitting $50.
2- Bundle products or create packages
Create bundles of items that offer a great experience or an all-in-one solution. By bundling products together, you will encourage customers to buy more products in the same order, but remember to make bundles for better prices than individual items.
3- Execute First Time Offers
Offering deals to new visitors will increase average order value. By providing this new audience with a one-time discount, they are likely to buy multiple products. You can also offer them an exclusive bundle deal as first-time shoppers.
4- Show savings up with bulk orders
Display savings when ordering larger quantities of the same item. For example, if you sell food, make the 6-pack cheaper than 3-pack, the 12-pack cheaper than the 6-pack, and so on. This way, you will get customers to buy more items and pay more, but they will feel happy that they saved some money per/item.
5- Give gifts and gift cards
A great way to increase average order value is to offer your customers a free gift when they reach a certain amount spent. Make sure when they are close to reaching the minimum to show them that they are about to unlock a free gift if they spend a little bit more. You can also offer them gift cards at the checkout, so they come back and use their gift cards and make another purchase.
6- Offer a Discount for orders over a certain threshold
Similar to free shipping and free gifts, you can offer a $10 discount or a 5% discount on orders larger than $50 or $100 based on your existing average order value, which you hope to increase. However, be careful with percentage discounts; you don't want to be too generous with these.
7- Upsell or cross-sell complementary products
Display, whenever possible, products which go well together and those which can benefit the customer and improve their experience. According to Databox, 50% of strategies marketers said they employ upsells and cross-sells. Make sure the items suggested are not too expensive so you can nudge the customer to add them to their order. The best example would be suggesting fires or a drink with food or suggesting a necklace with a wide-nick dress or even headphones with iPod. You get the idea!
8- Set up a customer loyalty program
Encourage customers to pay more per order by setting up a loyalty program with incentives and rewards when they spend more shipping from you. Loyalty programs increase average order value and overall customer lifetime value and loyalty to your brand.
9- Provide fully staffed live chat support for quick questions
Live chat support provides your prospects with immediate answers to their questions and concerns, which encourages them to complete their purchase and leads to fewer cart abandonment. According to Forrester, businesses that staff a live chat sell 10-15% more per cart.
10- Build up FAQ and informative product descriptions
Another way to answer prospects' questions and provide them with the needed info about the products to nudge them into ordering is by building an FAQ page and adding detailed product descriptions and specifications.
11- Use Web Design to Highlight Higher Priced products
Try to bring all attention to your expensive products through web design. Create visually appealing designs and layouts to highlight them. You can also focus on the usage of colors and fonts along with other aesthetic elements.
12- Add a Discounted Upsell After Order Completion
If you don't wish to introduce upsells during the checkout process. You can add it after the purchase is completed. Just when your customer is about to leave the website. Instead of directing them to a thank you page, direct them to an upsell page. Suggest a product related to what they have just bought, and add a sense of urgency that if they purchase that extra product now, they will get a 20% discount.
13- Email a discounted upsell
Some business owners prefer to focus on the current purchase and not distract customers with upsells. In this case, emailing customers a discounted upsell using email flow would be an excellent way to convince them to go back and buy extra items without risking pushing them during the current order.
14- Offer limited-time deals
To increase average order value, you can offer time-sensitive deals. For example, you launch a 48–hour deal where customers get a free gift or a special discount when they order a specific quantity of products or reach a certain order value. Urgency helps increase conversions and order value.
15- Allow refunds and returns
With a customer-friendly refund and return policy, customers will feel encouraged to try more products knowing they can get their money back or try something else easily with no questions.
16- Build trust and social proof
Social proof is a very powerful way to increase average order value. Proudly display your positive product reviews and customer testimonials to entice and reassure customers to buy your products. According to Search Engine Watch, 72% of consumers will only purchase a product after reading positive reviews.
17- Market to a more targeted audience
Keep studying your audience and focus on a narrower segment and a more targeted "heavy-user" audience instead of marketing to 1000 prospects for whom your products are not the right fit and will spend less on them. Focus on those who are more likely to buy many items and come back for more cause your products match their interests and needs.
18- Create contests
In eCommerce to increase average order value, you can run contests where customers have a chance to win prizes when they often buy or reach a certain order value. Let customers know that if they make a purchase, they will enter a contest where they can win one of several prize packs, and the more they buy, the better their chances are.
19 - Use personalization whenever possible
Utilize data to create a more personalized and targeted shopping experience to increase your average order value (AOV). By reviewing your customers’ order history and preferences. Create marketing campaigns with messaging and product recommendations that resonate with their interests.
The more targeted and personalized your store is, the more likely customers are to spend larger amounts. You can personalize product recommendations, email flows, and even ads with Converted.in
Book your demo to learn more!
