Increasing your average order value (AOV) is just as important as improving your number of conversions and traffic on your website. They are powerful weapons that can grow your business and revenue. After all, you don’t want your marketing efforts wasted when you spend so much money and time getting traffic to your website, only to have customers ordering one item at a time.
In this article, we will share 7 tips on how to increase your AOV. First, let’s start with explaining what exactly is your average order value.
What Is Average Order Value?
Average order value (AOV) is the average amount of money each customer spends per transaction on your store. You can easily calculate your AOV with dividing your revenue by your number of orders.For example, if your store has a total revenue of $1500 with 100 orders, your AOV would be $15.
However, it’s not necessary that you need to calculate your AOV by yourself. Shopify actually does it for you in their admin page. To view your customer reports:
- From your Shopify admin, go toAnalytics, then click Reports.
- In the Customers section, click on Returning Customers, One-time Customers, At-risk Customers, or Loyal Customers.
- Scroll down and you’ll see their average order value.
Why Should You Care About Your AOV?
- It can be a quicker way to in crease your cash flow. Getting more new traffic to your website usually takes longer than trying to increase your AOV for customers that are already at your store.
- Acquiring traffic usually has a cost to it, while increasing AOV could be as simple as optimizing your shopping cart.
- It’s a safer bet to rely on returning customers to increase AOV rather than generating more traffic as those new visitors haven’t completely warm up to your business yet.
7 Tips To Improve AOV
- Offer Product Discount
While it may seem counter-productive to offer discounts, this method can actually increase your AOV if you do it strategically. You can do so by offering volume discounts, meaning, when a certain order value results in a particular discount. For example, a customer can get $10 off if he or she spends $75 or more. Customers always love discounts, and sometimes, they are willing to purchase just to get the discount.This method works very well because it makes the customer feel like they are saving a lot, even though they are actually spending more.
2. Cross-sell And Upsell
Cross-selling and upselling is probably one of the oldest tricks in the book of marketing, but it’s because they really work. Cross-selling is showing an item that a customer may like that’s different from the product they’re viewing or purchasing. For instance, if the customer is looking at a skirt, you can add a pair of heels that look good with the skirt as a cross-sell. When the customer sees the two items together, they’ll be more likely to buy both of them in one order.
Upselling is when you encourage a customer to buy a more expensive item than what they already intended to buy. For example, a customer might be buying a pair of pillow cases, and you can upsell them with a duvet set. They key to cross-selling and upselling is that you want to show products that are related to the item they were already going to buy. You can show these related products on the product page and checkout page.
3. Offer Bundle Packs
Bundles are about providing the customer with a deal for multiple products in a pack, and to increase the amount spent per order. Let’s say that you sell men shaving products. You can create a starter kit with multiple items like a shaver, shaving cream, after-care cream, and a face towel all in one bundle for a special deal. By bundling your products, you can push your AOV from $10 for just a shaver to $65 for the whole set.
With the Holidays coming up very soon, youcan market the bundles as a gift set. Some people may feel lazy or unsure ofwhat to get for their friends and family, so getting a gift set filled withmultiple items would be the perfect way. With Shopzie, you can create bundlesof product based on quantity, variants, and supplier and Shopzie willautomatically fulfill the entire order without any hassle.
4. Free Shipping Threshold
For many ecommerce store owners, offering free delivery might be a financial challenge. However, offering free delivery once a customer goes over a certain order threshold might just offset this problem. You might even notice this is actually a common practice for a lot of online retail stores. For example, they will say something along the lines of“spend $70 or more to get free delivery”.
If a customer is buying the $65 shaving set and see that they only need $5 more to be qualified for free delivery, they might be tempted to purchase more just to free shipping. In this case, the free shipping threshold method comes in especially helpful if your shipping fee costs more than $5. If the customer sees that the shipping fee is $10 and they are only short by $5 to get free delivery, they really might as well buy $5worth of items.
5. Loyalty Program
Having a loyalty program for your store has many benefits. Besides being able to build a loyal customer base, you’ll also be able to increase your AOV. Repeating customers are more likely to buy more per order than those who are unfamiliar with your business.
The rewards you give out through the loyalty program is another leeway for you to increase AOV. Because in order for the customer to get the reward, for example, a pair of socks, you would need to deliver it to them. But of course, you would have to charge them shipping fee.Combining this method with the free shipping threshold method we talked about earlier, this encourages the customer to purchase something on your store to get the free delivery and the reward altogether.
6. Show Savings
Who doesn’t like to save money whenever they can? Your customers might feel guilty that they are buying so many items.To make them feel better about themselves, you can show how much they’ve saved in their shopping cart if any of the items they chose have discounts. This would make them feel like they’ve scored a deal because they’re saving so much.If customers see how much they’ve saved, they might feel tempted to buy even more since now they have “leftover money” they can spend.
7. Contests And Games
You might have seen McDonald’s do this before. They have a Monopoly game where customers can win prizes from their meals. The larger your meal is, the higher the chance of winning. In ecommerce, you can create a similar game to increase your AOV. You can run a contest where customers have a chance to win prizes when they buy a certain amount. For example, in order to be eligible to enter the contest, customers have to purchase $100 or more for a chance to win a $500 gift card.
The most effective way for the above 7 tips to work is to focus them on your repeated customers. These customers already warmed up to you, loyal to you, and trust your brand. All you need to do is put in a little extra effort to increase your AOV. When you concentrate more on those who are already engaging with you, you’ll see that customers will spend more.