The major advantage of raising the Average Order Value (AOV) is that each transaction yields a higher revenue. As a result, you can make your e-commerce company more successful by increasing your AOV.
Increasing sales is a top priority for many businesses, but this revenue is frequently misplaced. Instead of focusing on boosting marketing efforts and conversion attempts to acquire more sales, retailers should focus on encouraging consumers to buy more while they’re still engaged with the e-commerce site.
Knowing how much your consumers spend on each purchase may provide you with valuable information that you may utilize to grow sales by raising your AOV.
How is the Average Order Value Defined?
The average order value (AOV) is the average amount a customer spends when checking out from your e-commerce site.
The average order value of your store is the total revenue divided by the number of orders. This formula is the simplest method to do it. Keep in mind that it does not include marketing expenses.
AOV = Total Sales Revenue/Total Number of Orders
Let’s move on to the focus of this article – 8 proven ways to enhance your e-store’s AOV for boosted revenue.
Take a look and start implementing these changes in your business strategy for formidable growth.
1. Use Web Design to Highlight Higher Priced Plans
The simplest approach to improve AOV is to present the purchase alternatives in a way that emphasizes your higher-dollar value choices. Many firms have three pricing levels—but they frequently desire to sell more of the mid and high tiers.
You want your website’s visual aesthetic to highlight those alternatives, both in terms of colors/layout and words/language, in order for it to happen.
2. Add a Discounted Upsell After Order Completion
Upsells are used to increase the AOV by providing customers with a cause to spend more and creating a sense of urgency around it. After checkout, most e-commerce brands redirect customers to a thank you or order confirmation page. This chance may be effectively utilized to upsell instead.
Let’s assume a customer purchases a product for $100 and is ready to depart the website. Instead of sending them to a thank you page, send them to an upsell page. Suggest a product related to what they just bought, with the offer that if they buy that extra item right now, they will receive a 30% discount.
This is an easy upsell to provide, and your AOV will automatically rise.
3. Use a Minimum Dollar Threshold for Free Shipping
Increasing the minimum order amount customers need to hit in order to get free shipping is an effective way of boosting the AOV. It’s a small thing, but it works. We’re all consumers, and we’ve all tried to find one more $10 item so we don’t have to pay for shipping. It’s a vanilla thing to do, but highly effective.
If customers are close to earning free or reduced delivery, a pop-up informs them. As a result, they frequently add more items to the cart in order to meet the criteria. This strategy is an excellent step to enhancing your average order value with every checkout.
4. Cross-Sell Related Products During Checkout
The way you approach cross-selling might not appear to be a big deal, but there are dos and don’ts. Cross-selling the wrong way may result in your AOV staying stagnant.
It’s all about value addition, not superfluous goods. Cross-selling items that improve the customer’s experience rather than irrelevant products is crucial. For example, if someone is purchasing an Xbox, you should display Xbox games or accessories. However: don’t cross-sell with stuff that isn’t necessary or relevant.
The cross-sell should appear to the consumer as a bit of guidance. For example, “which dress shirts go well with my new suit?” If you can give a sure answer to that question, your AOV may rise.
5. Provide Bundle Deals
Customers may be more inclined to purchase another product as a result of bundle deals. For example, your deal could be a buy two and get a free gift or a buy three and receive a fourth free offer.
Customers will be more willing to spend a little extra when they feel they’re getting a better bargain. For e.g. Costco has perfected this approach for big-box retailers. Their AOV increased by over 25% after the brand implemented it for all their goods in the inventory.
6. Cross-Sell and Upsell in Your Email Flow
This approach works fantastically to accelerate e-commerce AOV. However, If you’re too pushy, your consumers may become sidetracked. If you do nothing, you might lose out on an important chance to boost your income.
Upsells, on the other hand, may be used to balance this tightrope. They aren’t included when you buy them, so as not to interfere with the initial transaction, but they will arrive in the buyers’ inboxes as soon as the purchase is completed.
Consider something along the lines of, “Thank you for purchasing ABC. Due to your most recent purchase, you can now get XYZ for 10% off.” You’ll spend practically nothing to set up add-on emails, so the buyers will put you in the trust zone and see another bargain deal worthy of their attention.
7. Market to a “Heavy User” Audience
“Going after a different audience altogether” is one of the most recommended ideas we heard. “The greatest way to boost AOV is to do marketing in a planned manner, ensuring that like most of your items-for-sale are as relevant to your marketing base as possible.”
For example, if you spend $1,000 to display an ad to 1,000 consumers who are only interested in one product, your AOV will be lower than if you invest the same amount of money placing an ad before customers who are interested in all or most of your products.
Call it the simple Pareto Principle of the 80/20 rule, but it works wonders for e-commerce marketers and sales reps.
8. Make sure your returns policy is flexible
A good returns policy does two things for you: it adds value to your items, and it adds value to your business. Buyers like the security of a solid return policy, which is a fantastic way to boost sales – even if the consumer isn’t necessarily in need of it! Customers are likely to order more when they are confident that they may return the items at will within a specified time period.
This minute policy change can dramatically increase your AOV for all transactions.
In a Nutshell
Here are a few methods for increasing average order values on your e-commerce site. To determine the best path forward, you should first make sure you have a thorough knowledge of your visitors so that you may apply these strategies at the most relevant point in the customer journey.
We recommend a powerful customer data platform with marketing automation capabilities like Wigzo.
Besides getting a 360-degree view of all your customers and campaigns, you can tweak your strategy on the fly for better ROI and revenue.
Take Wigzo for a FREE spin to see for yourself.