How to Increase Average Order Value for Your Ecommerce Store

21 March 2023. minute read

Aiming to increase website traffic and the number of clients who make purchases, every owner of an e-commerce shop has set goals for growth. Yet when it comes to maximising your online potential, there is one more crucial indicator that is frequently disregarded: average order value (AOV).

If done properly, boosting your average order value is one of the best strategies to boost your sales revenue. To put you in the best possible position to increase your turnover, the next article delves further into AOV.

What’s the Formula for Average Order Value?

Calculating your average order value is very easy to do using the formula below:

Average order value = Total revenue / Total number of orders

The AOV calculation, put simply, informs you of the average amount that each consumer spends on a purchase placed through your online business. Using Google Analytics to monitor your typical order value is also beneficial. You must enable ecommerce tracking on your account in order to utilise all of its capabilities.

Evaluate Your AOV with Context

Your gross sales revenue is what is meant by AOV. That indicates that it disregards your expenses. Your AOV will be £132.74 (£15,000 / 113) if your monthly sales are £15,000 from 113 orders. This amount doesn't take into account, for instance, any money you've spent on marketing and advertising.

Also, while increased sales revenue is excellent, it's critical to go deeper to identify the ideal end result for your company. Your goals could be for the typical order value to:

  • Deliver higher profits – if your expenses stay at the same level, all the additional income you generate will be pure profit.
  • Improve inventory turnover – selling and restocking products at a good rate, results in a healthier cash flow for your business.
  • Accelerate profitability – reaching a positive ROI (return on investment) occurs a lot faster when your business has a better AOV.

15 ways to raise your online store's average order value

Now that you are familiar with the foundations of average order value, let's look at 15 practical strategies for increasing it online.

Set a Minimum Order Level for an Offer

Giving your clients an offer for meeting a minimum threshold is a smart strategy for increasing average order value. Any offer is acceptable, such as free shipping or a discount once you spend £X. Make sure the minimum threshold is set higher than your existing AOV. You can provide free delivery or a 10% discount to customers who spend more than £165, for instance, if your current AOV is £132.74 using the same example as earlier. This strategy frequently gives your clients the extra push they require to increase their purchases.

Build product bundles or packages

By designing thoughtful bundles and packages that entice customers to spend more, you can raise the average order value. The solution in this situation is to group related things that make sense to buy together. For instance, a customer purchasing a tub of protein powder is probably also interested in a shaker bottle. A purchaser of a printer might also desire to purchase ink cartridges. A fantastic strategy to raise AOV is to package the products together at a slightly lower total cost than they would be if purchased separately.

Online upselling and cross-selling

Upselling is the technique of persuading customers to upgrade or purchase more expensive versions of the product they're interested in. In order to stimulate additional purchases, you may strategically place a message indicating that V5 is currently in stock while highlighting some enhanced features and advantages if they arrive on your website intending to purchase V3 or your smart speaker.

Cross-selling involves making product recommendations that complement the items a customer is purchasing. For instance, if a person is looking to purchase a pair of jeans, some of the suggested items might be a stylish top that completes the ensemble, a stylish belt, or a great pair of shoes. Most consumers don't need to dig a little farther into their pockets—the convenience of having everything they need in one location is enough.

Employ customer loyalty programmes effectively.

Use customer loyalty programmes to honour your valued clients. You can give out discounts for a specific quantity of transactions or repeat business in exchange for points that can be redeemed later after hitting a specified threshold. This assists in converting regular customers into brand champions who will broaden your brand's appeal. Due to lower associated marketing and advertising expenses, loyal consumers are also far more likely to make larger purchases from you and have a higher Return. All of this is positive news for your AOV marketing.

Offer deals that are time-sensitive.

Increase the average order value for your online store by taking advantage of limited-time specials. Especially if there is a sense of urgency associated with the offer, many buyers simply can't resist a fantastic deal. In this regard, you can add a new, momentarily-available scent to your well-liked candles. As an alternative, you can use the addition of a 48-hour countdown offer with a 35% discount as a strategy to sell off your current supply of wax melts.

The Benefits of Bulk Purchases for Consumers

Everybody enjoys finding a great offer that will save them money. This can work in your favour if you make it very clear to your customers how much money they can save by purchasing in quantity. To make the value of buying in bulk clear to your customers, show them the savings they are making on each line item in addition to the overall savings. Their willingness to spend more each order increases with improved value perception, which raises your AOV.

Provide 'First-Time Buyer' discounts

You've probably visited websites that advertise a special discount for brand-new subscribers or clients. One of the best strategies to raise the average order value for your online store is by doing this, which not only helps to increase conversion rates but also increases average order value. As they will be getting more for their money when they obtain a discount, customers are more likely to add additional goods to their shopping cart.

Describe general product discounts and gift cards.

Discounts on products can encourage more spending and raise the average order value in e-commerce, as was previously mentioned. Be inventive and, for instance, package your reductions as gift cards. It is more likely that a customer will return and spend more money with your company if you provide a real or electronic gift card for 15% off your subsequent order.

Provide Complimentary Trials for More Expensive or Superior Items

Before making a purchase, consumers simply adore giving something a test run. It is very comforting to know that a product does what it says on the label. Offering free samples for more expensive or premium products is a highly effective way to increase AOV as well as conversion rates. Customers are more likely to spend more money with your company when they can see the advantages of a product in use, which eliminates any remaining doubt.

Grow Authority & Trust Among Your Target Market

Being an authority in something can naturally help to increase trust. When you provide a professional image that positions you as a market leader in your specific niche, people are more likely to see your brand favourably. There is a cascading effect that directly improves your average order value when people sincerely believe in your brand and what you stand for.

Maintain a supple returns policy

Another strategy to encourage clients to buy more items from your e-commerce site is to provide a flexible returns policy. Knowing that customers may quickly return products for an exchange or full refund if necessary boosts a customer's confidence in your brand because there is no chance to trial items before purchasing. Your average order value will rise as a result.

Use analytical data.

Making informed decisions based on analytic data is helpful for marketing campaigns as well as for any other marketing endeavour. To interpret the data, continuously delve deeper into your measurements. From there, you can try several strategies to entice clients to add more things to their shopping carts.

By their current average order value, for instance, you can divide up your customer base. After that, you may use strategies like free shipping, discounts, and cross-selling to consumers who are on the lower end of the spending range or loyalty programmes to encourage your higher-spending customers to make even larger purchases.

Target Consumers Using Buying History

According to the adage, selling to an existing client is more simpler than marketing to a potential new client. By analysing the data you already have on your customers and using it to retarget them based on their past purchasing behaviour, you can take advantage of this. If you recently updated a product, for instance, you may immediately advertise it to the group of customers who bought the previous edition. Before even promoting to your whole pool of current customers and beyond, you may instantly raise your average order value by putting an emphasis on the new range of perks and better value for money.

Describe payment plans and financing options.

The emergence of payment service providers like Debit / credit cards has made it simpler than ever for e-commerce enterprises to provide flexible payment alternatives and customers to take advantage of flexible payment plans. The ability to choose various financing alternatives also increases average order value. When a higher value goods can be purchased in several instalments, customers feel more at ease doing so. Additionally, it means that your company can close the deal and keep customers from shopping around for less expensive options.

Testing A/B

You must test each of your AOV-boosting strategies to ensure that it is working as effectively as possible. This is possible with A/B testing, commonly referred to as split testing, which is a tried-and-true technique for comparing various website components to find the most effective one. If you fail in this area, your e-commerce company may start losing conversions at a startling rate. With that in mind, make it a practise to test key components to make sure you're putting your attention where it belongs.

To improve the performance of your online store, evaluate your AOV.

The top-performing e-commerce companies use a methodical approach to metrics analysis and use any chance to promote growth. Increasing the average order value is one of the greatest methods to do this.

If you're not sure where to begin, consult an expert and have any of the above-mentioned ideas put into action by hiring an ecommerce developer like Vsourz. Contact one of our e-commerce experts today to find out more about how to raise your AOV.

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