5 Ways to Increase Average Order Value
There are lots of tools in the arsenal when it comes to increasing revenue on your eCommerce site. Managers spend resources on acquiring new traffic, advertisements, and even trying to outsmart Google’s search algorithms. What often gets overlooked in the plethora of efforts is simply increasing the average order value (AOV)! Why not make the most out of willing customers on your website who are ready to buy? Let’s take a look at five key strategies that will help your customers fill up their shopping cart:
1.Offer free shipping! At or beyond a certain price point, it is highly beneficial to offer your customers free shipping. Shoppers might be incentivized to throw in an extra item or two when they border that threshold to avoid the shipping cost. It’s an easy rationalization on their part: you either spend x amount on a lower-priced item that you may be able to use, or you spend that same dollar amount on shipping.
Here's an equation to help ensure that free shipping will increase AOV. Math, yikes, but bear with me! Take the current AOV of your eCommerce shop and add 10% (or more) to the dollar amount required for free shipping. Any orders that meet the requirement will always go towards increasing your AOV. The only good math is easy math, right? You’re on a roll, but keep reading!
2.Establish a loyalty program! A points system is a great way to encourage customers to spend more. Shoppers want the most value for their money, and earning points on purchases is an easy way to increase the value of their dollar. According to Annex Cloud, 23% of shoppers who said that their loyalty to a company has increased over the past year report that the reason was a loyalty program. "More value, more spending" is our goal here. Businesses have been using this tactic for years with cash back programs. Other benefits of a loyalty system could include special coupons, early-bird offers, and increasing loyalty to your brand! Get creative with it!
3.Utilize up-sells and cross-sells! Customers are always intrigued by newer versions of their current products or products that are closely related. Hubspot reports that, "you're 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect. So if your company isn't cross-selling and up-selling, you're just leaving money on the table" . Position these products strategically on your website or even make final suggestions at the checkout process. Bundling can easily be combined with up-sells and cross-sells to help with this initiative. This is a great way to increase AOV on your eCommerce shop by ensuring convenience while saving your customer’s money on related products.
4.Use special deals! Offering discounts for certain order amounts or sizes is an easy way to incentivize customers to spend more. Why not try a variation of the traditional BOGO? "Buy two get one free" might be a good place to start, or "buy three" if you’re feeling optimistic! Other examples of special deals could include “$10 off $60 or more” or a free gift with orders over a certain amount. You may be surprised at how motivated customers are to meet those minimums while shopping! These small perks can certainly help drive up that AOV.
5.Understand the human mind! You don’t have to channel your inner Professor X, because this is quite simple! A widespread mentality among shoppers is the fear of missing out, or FOMO. Use time-sensitive offers that arouse a sense of urgency to purchase now and add more items to the cart, such as limited time sales. You can also use a countdown timer, or even show a “low stock” alert under the item. No one likes to miss out on a good deal, and there’s nothing wrong with reminding your customers of that!
If you’re wondering which of these strategies is the most important, the answer is: all of them! They can be implemented immediately and easily to your eCommerce shop and will help immensely to increase your average order value. Ultimately, these tactics help to increase the value of your offering, which always helps customers spend more. What are you waiting for? Your increased bottom line is eager to meet you!
Want to learn more ways to optimize your eCommerce site? Schedule a free site audit with one of our eCommerce experts today.