Increase The Average Order Value (AOV) Of Your Online Store
There are many strategies and tactics you can implement to improve the performance of your online store and generate more revenue. But none are quite as powerful as increasing the amount your customers spend in a single purchase. This simple yet commonly overlooked tactic is referred to as increasing your Average Order Value (AOV), and it can help you achieve revenue goals faster and make your ad campaigns more profitable.
You might be wondering: why is that? Well, think about it this way: The traffic you drive to your online store via your paid ads is an investment. However, if you were to increase the amount customers spend every time they make a purchase, you can increase your revenue, giving a boost to your cash flow (yes please!), all without having to spend an extra cent (on advertising) to do so.
Increasing AOV is all about getting your customers to buy more products, or more expensive products every time they shop on your site (ideally both). Let’s dive into the tried-and-tested strategies we use to help our eCommerce clients boost their AOV.
But first… How do you calculate your current AOV?
In a nutshell, the AOV is the average dollar amount per order, or:
Total Revenue ÷ Number of Sales = AOV
For example, if your online store generated $15,000 in June, and there were 100 orders placed, the average order value is $15,000/100 = $150.
If you’re using Shopify, you can view these figures in the overview dashboard.
How to increase AOV using offers
Offers are a highly effective way to increase your AOV, as they prompt customers to shop more.
- Include free shipping: With a free shipping threshold, customers are likely to add more product to their basket. This threshold should be set at your ideal AOV. If your AOV still remains low, try increasing the free shipping threshold by 20-30%.
- Creating offers at different price points: Take the free shipping threshold one step further by creating multiple offers at different price points, in order to incentivise customers at both ends of the spending scale. For example:
Offer 1 – Get Free Shipping when you spend $50
Offer 2 – Receive your FREE GIFT when you spend $100
- Add an offer progress bar: Let customers know how close they are to unlocking an offer by displaying a visible progress bar coupled with messaging that encourages your customers to add more to their cart. For example: “You’re $50 away from free shipping”.
- Tell customers how much they’re saving: Highlight the dollar amount in savings during the checkout process to let customers know they’re getting a deal by purchasing more items.
Remember to always display offers clearly and prominently along the entire path to purchase.
How to increase AOV by cross-selling and up-selling
This approach uses your products to give value.
- Cross-selling: Recommend products that compliment the product that customers have added to cart, which saves them the effort of browsing.
- Up-selling: Help customers upgrade their purchase by recommending a similar, more expensive product, or by inciting them to buy more of the same product(s) in exchange for a discount.
How to increase AOV with product bundles
Create product bundles by grouping multiple items together and selling them as a collection or gift set. You can also use bundles to create a minimum order value, and avoid customers buying cheaper products separately in small quantities.
Product bundles are perfect for attracting first time customers, as you can create sample or introductory packs, which work great in advertising campaigns too.
To wrap things up: increasing your AOV is one of the best ways to get the most out of your ad budget and help your online store generate more revenue. Bear in mind that if your AOV is below $50, generating profitable returns via paid social can be tricky. We aim for a minimum AOV of $80, and use the tools and strategies mentioned above to help our eCommerce clients generate more $$$ for every transaction.
Struggling to hit that magic number?
Get in touch or lock in a free strategy call with a member of our team.