Seven tactics to boost Average Order Value (AOV) for your eCommerce store
‘A boost in sales’ is what every e-commerce store intends to achieve. There are many ways to increase the sales for your store. One is to find more number of customers that purchase your products and increase the overall sales. Another tactic is to increase the basket size of existing customers, which, again, will lead to higher sales volume.
Increasing the basket size means increasing your earnings per customer order. Therefore, even if the number of customers remains the same, you can increase your sales with an increase in the average order value (AOV). Average order value is defined as the average value of each order a customer places at your e-commerce store. The formula for AOV is Total Revenue divided by Total Number of Orders.
For example, if you earn USD10,000.0 in sales from 100 orders, the AOV is 100; however, if the number of orders reduces to 50, then AOV is 200. That means you are deriving more value from 50 customers in the second case. On the other hand, in the first case, if you have less than 100 customers, you need to invest in customer acquisition to achieve sales of USD10,000.0.
Why does AOV matter to an eCommerce store?
AOV matters to an eCommerce store because of the following reasons:
Average order value is a metric to gauge your customers’ purchasing behavior. If one customer purchases more than two customers combined, then your AOV increases. It gives you an insight into whether a particular customer purchases more in one order or has more orders of less value.
Insights on average order value open the door to knowing the effectiveness of your marketing campaigns. A higher return on investment from a marketing campaign results in higher AOV. You will also be required to invest less in acquiring more customers but harness more from efforts in increasing the sales volume from existing customers.
With a higher average order value, your inventory outflow is high. This is good for your e-commerce store, as inventory is not piled up and is churned off easily to avoid the assembly of expired products in the inventory.
The average order value metric gives a glimpse of the effectiveness of your pricing strategy. Suppose you increase or decrease a product’s price, and you calculate the average order price for that product. Based on a rise or drop in AOV, you can gauge whether your pricing strategy is working or has failed.
How do I increase AOV for my eCommerce store?
Marketers know that a high AOV is good for their eCommerce stores. Hence, we list below the key strategies that you must use to increase the average order value at your store:
Use web design to highlight premium products
To improve the average order value for a customer, you want them to buy high-priced products that result in more money for you. In this case, the best strategy is to highlight such premium products on your website. Use the various techniques of color, keywords, placement on the webpage, and good testimonials to make the online shoppers focus on those products more.
Try upselling and cross-selling to increase AOV
When customers are buying online, you must give them reasons to spend more – reasons that are attractive enough to lead to a purchase. Specifically, you must upsell or cross-sell, and how do you do these?
For upselling, you display similar, higher-priced products to the main product being purchased and offer discounts if one of those products is bought in the current transaction.
For cross-selling, you offer suggestions of related products that add value to the main product and improve its usefulness.
Offer bundle deals
Another great tactic to lift your average order value is bundling products and selling them at a discount. You need to ensure that the discounted bundle you create must look interesting and of use to customers – create a deal that they feel will give more value to them. This bundle can be of related products or the same product when bought in more quantities or higher volumes.
Offer free shipping benefits for orders over a defined value
Free shipping is an attractive offer for any shopper. It is also a good tactic to increase the average order value. You must display this message when the customers have added items to their cart. This is the time when they will realize that just by adding a small value item, their shopping cart will reach a value, at which they will get free shipping.
Use loyalty programs to your advantage
Put in place loyalty programs through which customers get discounts or earn points for every purchase. To earn points and get more discounts, these customers become your repeat customers and order more quantities or volume to earn more points, which, in turn, results in higher average order value.
Display overall savings to customers
You must display the money a customer is saving by buying a larger quantity or higher volume of a product. They must not feel guilty about spending more; instead, they must feel like they are saving money by buying more quantities.
Offer payment plans for more expensive items
Customers find it very attractive if the eCommerce store offers them an option of paying in installments or Buy now, pay later. If such payment options are available, customers are ready to buy higher-priced products, which increase your average order value.
Try some of these techniques to see your average order value rise. Thus, you can earn more without investing in new campaigns or new products, but just by using these tactics. If you wish to know more about such tactics or want help with implementing them, you can reach out to us – we are Technovisors. We are an IT consulting, data analytics, and digital marketing firm in Ahmedabad, India. We solve your business problems so that you focus on your growth strategies.
How do we help increase your eCommerce AOV?
We will study your business and products and understand the purchasing behavior of your customers. Based on these insights and market dynamics, we suggest the most appropriate strategies to improve your average order value. Our tactics to improve your eCommerce AOV will be based on global best practices, industry situations, and market conditions. We have an experienced set of people with the knowledge and expertise of guiding eCommerce companies to higher profits.