A How-To Guide for Increasing Average Order Value (AOV) on Your eCommerce Site

A How-To Guide for Increasing Average Order Value (AOV) on Your eCommerce Site

Wednesday, June 22, 2016Lauren Macdonald

This Guide Will Show You How You Can Increase Your eCommerce Site's Average Order Value 

As we’ve mentioned earlier, boosting customer retention rates is one great strategy for increasing profit, but today we want to discuss another profit raising technique—increasing Average Order Value (AOV).

So what exactly is AOV? In simple terms, it is the average dollar amount spent each time a customer places an order on an eCommerce website or mobile app. Note: To calculate average order value, simply divide the total revenue by the number of orders.

In order to help you out, we’ve put together a simple How-To Guide For Increasing Average Order Value, so that you can easily increase your AOV and drive in more revenue:

Establish Free Delivery Thresholds

Customers are always looking to shop on websites that offer free shipping. One way to satisfy your customers’ wants, while still ensuring that you are profitable, is to set free delivery over a certain threshold. For example, if you find on average that people spend around $40.00 on your website, and if delivery costs you $4.00, then try setting free delivery at $50.00. This is a very effective method for increasing AOV because most customers would rather spend an extra $10.00+ for more product, than spend their money on shipping fees.

Don’t forget to set up a feature on your website that will let customers nearing the threshold know that they only need to spend X amount more dollars in order to take advantage of the free shipping offer.

Offer Discounts on Minimum Purchases

Try offering incentives on your website in the form of discounts for those who spend a certain amount of money. For example, you may wish to offer 10% off a minimum purchase order of $50.00, or 20% off when a customer spends $75.00 or more. Tactics like these will encourage customers to spend more money at once in order to take advantage of the savings they’re offered.

It’s also a good idea to make these discounts limited time offers so that those who are not desperate to buy right away will be more inclined to do so. For example, try offering 20% off when a customer spends $75.00 or more for the next 2 days only. This will create a sense of urgency in your customer and compel them to buy right away.

Don’t Forget to Upsell and Cross Sell

Upselling is a strategy to sell a superior, more expensive version of a product that the customer is already interested in buying. Say you’re selling Blu-ray players, for example. Beside a Blu-ray player for $100.00, you may wish to show another option that is $150.00 but comes with numerous value-added features that the $100.00 version does not. You’d be surprised at how many customers will spend a little bit more for a better product.

Cross selling has its benefits as well. This is a strategy to sell products related to that which the customer is buying or considering buying. For example, if a customer is looking at purchasing a new pair of pants, you may wish to show them belts, shoes, or shirts that would complete the outfit. Both of these strategies can be very effective when it comes to increasing average order value.

Offer Bundles and Saving Packs

Let’s say you own an eCommerce website that sells hockey equipment. If you sell each piece individually, you may run the risk of customers buying a helmet from you, and then going elsewhere for the other products, or at least deciding to wait and purchase the rest later. What you may wish to do, is determine the total cost it would be if a customer purchased each piece of equipment from you separately, and then offer a “Hockey equipment starter pack” option for $50.00 less. By bundling the products together and offering a discount, you can persuade your customers to spend more at once, both for the convenience and for the cost-savings.

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