Average order value is one of the most important metrics to consider when you’re looking for ways to boost revenue. Though launching a strategy to increase average order value can be a puzzling process. Especially if you don’t know where to start.
If you want to increase average order value or are wondering what AOV means, we’ve got you covered. Here are 8 simple ways you can increase AOV for your online store.
What Is AOV?
Average order value (AOV) is essentially a metric or key performance indicator. It’s used by online stores to estimate the amount that a customer would typically spend in one purchase over a defined period.
Knowing how much money your customers are spending in your online store can allow you to adjust your strategies to boost your business’s revenue.
Calculating your business’s AOV is effortless. Simply divide your total revenue by your total number of orders. For example, if your revenue was $10,000 and your number of orders was 200, your average order value would be $50. Easy, right?
Now that you’ve figured out your average order value, here are 8 simple ways you can increase it.
8 Ways To Increase Average Order Value
Free Shipping With A Minimum Spend
There are plenty of ways your brand can offer free shipping to customers, though setting a minimum spending amount is a popular practice.
By setting a minimum spending threshold for free shipping, and properly adding the costs into your price points, you can entice your customers to spend more.
A bundle-offer means selling your products cheaper when they’re purchased together, as opposed to when they are purchased separately.
Creating bundle-deals in your store can convince customers to take advantage of the savings while enticing them to spend more. For example, if you were to buy a fast food meal deal – the bundle would likely be cheaper than if you purchased a cheeseburger, chips, and a drink separately.
You’re putting money back in your customer’s pockets while increasing average order value for your own business.
Launch A Loyalty Program
Loyalty programs can benefit a store in more ways than one. They can help to build customer loyalty, generate brand advocates, and improve your AOV.
With enticing incentives in place, a loyalty program can encourage your customers to come back to your store. These incentives could be as simple as exclusive discounts, a free gift with purchase, or free shipping on certain products.
Offering a discount? Be sure to let your customers know that the offer is only available for a limited time.
This can create a sense of urgency in your store, encouraging customers to buy now rather than waiting until it’s too late.
Regardless of how you’re advertising the sale, be sure to mention a date when the offer will end.
Discounts With A Minimum Spend
Free shipping isn’t the only way you can incorporate a minimum spend into your average order value plan.
Entice your customers to spend more money in your store by offering discounts on purchases above a certain amount. Just make sure you set the minimum spend slightly above your current AOV. This should be a reasonable amount to entice customers to spend that little bit more.
Whether it’s for a limited time or only for people in your loyalty program, this strategy can save your customers money and grow sales.
If you’re hosting a sale, be sure to show your customers how much money they’re saving when they shop with you.
Especially if the offer is for a limited time, you can encourage customers to take advantage of the savings and increase their cart-size by showing how much value they’re getting.
Cross-Sell At The Checkout
Cross-selling is about offering tailored purchasing suggestions to your customers, based on what’s currently in their cart. For example, if your customer were to purchase a camera from your store, some potential products that you could cross-sell include batteries, a gimbal, lenses, or other relevant accessories.
This strategy can be a great way to boost sales and add more value to your customer’s experience.
Free Gift With Purchase
A free gift with purchase promotion can be a great way to boost conversions, support customer loyalty, and increase average order value. After all, who doesn’t love a free gift?
Just like with free shipping, start by establishing a realistic minimum spending amount. This should be slightly above your current AOV.
If you choose a valuable and enticing gift that aligns with your customer’s interests, they’ll be encouraged to spend more in your store.
Looking for more information? Click here for our step by step guide for running a free gift with purchase offer.