It’s time to step up and increase your eCommerce Average Order Value! From better deals to gift cards, check out these tried-and-true strategies.
Online selling isn’t always easy. There’s a lot to think about when it comes to balancing the books – from website hosting costs to shipping charges.
But what if you could start making more without spending more? Here we take a look at simple ways to increase the Average Order Value of your eCommerce store – no matter the size of your store or what you sell.
What is Average Order Value?
Average Order Value (AOV) refers to the average amount that your customers spend in your eCommerce store. In order to calculate your AOV, simply divide your total revenue by the total number of orders you’ve received.
While not representative of overall profit margins, AOV can give you an indication of how much your customers are willing to spend per order, and how much return on investment (ROI) you’re getting per customer.
If your AOV is low, then it’s time to look at ways you can increase it to improve your overall numbers.
Ways to Increase Your Average Order Value
Here are eight ways you can work on improving your AOV:
1. Set a Minimum Order Amount
By introducing a minimum order amount, you can increase your AOV almost instantly. You can control the minimum order amount in a couple of different ways – for example, only allowing users to check out if they spend over a certain amount or introducing a minimum quantity of items before customers can make their purchase.
If you run your store using Magento, the Marketplace Minimum Order Amount Module for M2 gives you full control on setting a minimum order amount.
2. Introduce a Free Shipping Threshold
While it might seem counter-intuitive to offer something for free when you’re trying to make more money, free shipping options can actually be a great way to get customers to spend more.
Research by Walker Sands found that 79% of customers in the US would be motivated to make a purchase if free shipping was an option.
However, it’s no good offering free shipping for every customer if it doesn’t make economic sense for your business. Instead, consider introducing a free shipping threshold – for instance, if a customer spends over $50, they will automatically qualify for free shipping.
With a free shipping threshold, you’re giving customers what they want, and encouraging them to spend more in order to get it.
Additionally, don’t forget to restrict shipping in Magento 2 to only countries and/or cities that are profitable for your business.
3. Offer a Discount
Again, it might seem odd to suggest giving money off when you want to increase order value but offering a discount can encourage shoppers to spend more than they might ordinarily.
Much like free shipping, this method works best when you introduce a threshold. For example, you could give customers a $10 discount when they spend $75 or $20 off when they spend $100. You need to look carefully at your numbers and think about what makes viable sense for your business.
4. Create Product Bundles
Some products just go well together – and it can be helpful to highlight this to customers in order to increase your AOV. By offering sets of products for a slightly discounted price, you can encourage shoppers to put items of a higher value into their cart.
Another way of using bundles to your advantage is to offer a buy-one-get-one free deal on products that work well together, or a complementary free item with certain sets of products.
5. Up-Sell, Cross-Sell, and Suggest Add-ons
Wherever you are in the world, we bet you’ve browsed Amazon once or twice. On Amazon, you’ll find that you’re often faced with other recommended items at every turn. This is a fantastic way to increase AOV.
By giving customers recommendations based on what they’re looking at, you’re not only being helpful and ensuring they don’t have to look at other eCommerce stores, you’re encouraging them to purchase more than just the item they set out to buy.
Cross-selling is the core of the Automatic Related Products extension‘s functionalities.
With it, you can show a persistent block with products that your customer is sure to enjoy.
6. Highlight Savings on Large Orders
If you’re offering any discounts and deals, it’s always a good idea to make it clear how much the customer is saving when they go to checkout.
We’ve all been there – you’re browsing a website and before you know it you’ve got more than $100 worth of items in your cart. It might be more than you’re willing to spend, until you click through to the shopping cart and see that it could have cost more than $200 and you remember that you’re getting an excellent deal.
After all – who doesn’t love a bargain? By displaying the savings, you can reduce cart abandonment and increase your AOV with minimal effort.
7. Offer Gift Cards or Vouchers
Offering customers a gift-card is another great way you boost your AOV.
For example, you could offer a $5 or $10 voucher after the customers first purchase with you. So, not only will this boost your AOV, but it will also make the customer more likely to shop with you again in the future in order to make the most of the deal.
Again, make sure that this method doesn’t result in a loss, and be transparent on any restrictions that customers might face – i.e it can only be spent on certain items or in a certain time period.
An easy way to work with free gift cards is the Free Gift and Discount Extension for Magento 2.
8. Use Personalization to Your Advantage
Here at CreativeMinds, we know the importance of personalization in online shopping. It’s a growing trend among online retailers, and not one that you can afford to ignore. By making the most of customer browsing data, you can increase your AOV in next to no time.
By providing product recommendations tailored toward the individual customer, you can encourage them to purchase more by recommending things they might need before they even realize they need them.
If you want to learn more about personalized product recommendations, check out our blog post on the topic.
Finding the Right Strategy for You
As we’ve mentioned, whatever option you go for you always need to make sure it makes sense for your business – but by implementing strategies such as this your AOV will start to rise.
For more business tips and the latest news on eCommerce, check out the rest of the CreativeMinds blog.