For any ecommerce business, improving ROI and ROAS are among their many goals, and there are a number of ways to do this. If you’re running Google Shopping campaigns, you can prioritize your campaign structure. If you’re only using search ads, you can expand to social or display. And of course, you can optimize the shopping experience as a whole. That last option yields many benefits, one of which is increasing average order value.
As you can see above, average order value benchmarks vary by industry. But the methods to increase average order value can often apply across industries. So read on to learn 10 practical, but not-pushy ways to increase average order value for your business. Let’s dive in!
Table of contents
- What is average order value?
- How to calculate average order value
- How to increase average order value
What is average order value (AOV)?
Average order value (AOV) is a metric that measures the average amount spent per transaction on a website, in an online store, or within a specific time period. It is often used by businesses to track customer behavior, find profitable sales channels and segments, and ultimately to assess and improve their sales performance.
AOV can be calculated for an entire company or for specific product lines, channels, or regions. For example, a company might compare its AOV from year to year or examine how different marketing campaigns affect AOV.
How to calculate average order value
To calculate your AOV, simply take the total revenue from all orders in a given time period and divide it by the total number of orders placed during that same time period.
- Total revenue: $2,300,000
- Number of orders: 56,450
- Average order value = $2,300,000 / 56450 = $40,744
10 ways to increase average order value
Let’s go through nine practical ways that you can actually increase your average order value and boost your business’s profit margins.
1. Boost your website’s social proof
When a new website visitor comes to your website, they might have only just become aware of your brand for the first time. This is when you have the chance to impress them and show them proof of why they should buy from you.
Social proof shows potential customers that others are happy with your product or service, giving them confidence to buy. There are a few different ways you can use social proof, but for increasing AOV, try these:
Add reviews to your product page and homepage
If you have customer reviews on your specific products, add them to their respective product pages. Here is an example of a brand called Oodie that showcases its customer reviews on the homepage.
Use testimonials and other trust signals
Customer testimonials and influencer endorsements help build trust and credibility, which can lead to more sales and a higher average order value.
List your achievements
Adding your achievements and awards to your website is another good way to increase social proof and AOV. This helps build trust with potential customers and show them that you’re a credible company.
For example, LARQ features their awards on their website.
2. Test out different website copy
The copy on your ecommerce website plays a big role in whether or not customers decide to make a purchase.
If you’re not happy with your current conversion rate, it might be time to A/B test your website copy. This simply means creating two versions of a particular element and then seeing which version performs better.
You can A/B test just about anything on your website and landing pages, including:
- Call-to-action buttons
- Product descriptions
- Product images
- Website layout
- Checkout processes
If you’re not sure where to start, check out these ecommerce website trends and examples for inspiration.
3. Make customer service your priority
Website customer service is often seen as a low priority, but it should be taken seriously as it removes purchasing barriers and helps to build trust—both of which will help to increase your average order value.
In addition, good customer service can help to resolve problems quickly and efficiently, saving time and money in the long run.
Here are some of the things you can do:
- Add 24/7 live chat: Live chat allows website visitors to get their questions answered in real time, which can help to reduce any hesitation or confusion they may have about making a purchase.
- Create a help/FAQ page: By providing your customers with a resource page they can rely on, you’ll show them that you’re committed to providing them with the best possible experience, which will increase your average order value.
- Add a contact number: Make your business as easy to reach as possible, with a tap-to-call option if you can.
- Add a contact email: If you don’t have a contact email yet, it is crucial to have one. Any questions your customers have, they should be able to contact you and get help.
Excellent customer service is especially important if you’re selling expensive items or items that require a significant investment or commitment.
4. Include upsell options…
Upselling is when you encourage customers to purchase a more expensive version of the product they’re interested in. For example, if someone is looking at buying a basic pair of shoes, you might try to upsell them by offering a more expensive option that’s made with better quality materials, is a limited edition, or offers customization options.
In the example below, Proflowers has not just a standard bouquet option, but also a Deluxe, Premium, and Exquisite option.
5. …and cross-sell options
Cross-selling is when you encourage customers to purchase complementary products. For example, if someone is buying a dress, you might try to cross-sell them by offering jewelry or shoes that would go well with the dress.
This is a great way to increase your AOV because it allows you to sell multiple products to the same customer. It’s also a great way to get rid of any leftover inventory you may have.
Pro tip: Upsells and cross-sells work especially well for a dropshipping business model, but you need to be careful not to come across as too pushy. The key is to make sure you’re only offering products that are genuinely relevant and useful to the customer.
6. Bundle products together
Bundling products together is a common tactic used by many businesses to get customers to spend more money per order.
For instance, if you are selling beauty products, you could create a bundle that includes a few different items like shampoo, conditioner, and a hair mask.
Let’s look at this example from Target. When you add a product to your cart, the website creates a bundle of frequently bought together products.
Pro tip: The key to creating successful bundles is to make sure that the products complement each other and work well together. You also want to make sure that the bundle is priced in such a way that it represents a good deal for the customer.
7. Add limited-time offers
Limited-time offers create a sense of urgency that encourages customers to make a purchase before it’s too late. For example:
- Give a free gift with the next purchase for a limited time
- Offer discounts on certain products or segments
- Use different seasons and anniversary days to make limited-time sales
- Run a stock clearance and creating a limited stock sale
You could also add a countdown timer to your website to let customers know how long they have to take advantage of the offer, like Pura Vida below:
Pro tip: No matter what type of sales promotion you run, make sure that it’s clearly visible on your website. You want to make sure that customers don’t miss the offer and end up missing out on a great deal.
8. Use exit-intent popups
Exit intent popups are a great way to increase your AOV, and they’re also a great way to boost sales in general. These appear when a customer is about to leave your website, but you can also set other conditions, such as after a certain amount of time on your website or after scrolling down a certain percentage on a page.
The popup typically contains an offer, such as a discount or a free gift. The goal is to get the customer to stay on your website and make a purchase or sign up for an email newsletter.
Pro tip: You need to be careful not to overuse exit intent popups. If you’re constantly bombarding customers with pop-ups, they’re likely to get annoyed and leave your website without returning. Use them sparingly and only when it makes sense. For example, you might want to use an exit-intent popup on a product page, but you wouldn’t want to use one on your home page.
9. Add a free shipping threshold
This method encourages customers to add more items to their cart in order to reach the free shipping threshold. For example, if your free shipping threshold is $50 and a customer has only purchased $42 worth or items, they’re likely to add more to reach that $50 mark.
You can either set a dollar amount or a quantity threshold for free shipping. For instance, you could offer free shipping on all orders over $50, or you could offer free shipping on all orders over five items. In the example below, the threshold is $35.
Pro tip: The key is to find a free shipping threshold that works for your business. You don’t want to set the threshold too high, or else customers won’t bother trying to reach it. You also don’t want to set the threshold too low, or else you won’t be making enough money to cover the cost of shipping.
10. Start a customer loyalty program
Customer loyalty programs are a great way to boost your AOV, create loyal customers, and increase customer retention. This is because they encourage customers to make repeat purchases—or even to purchase more within one order—to earn rewards.
There are a few different ways that you can start a customer loyalty program. For example, you could offer discounts to customers who make repeat purchases, or you could offer points that can be redeemed for free products.
You could also start a referral program, where customers earn rewards for referring new customers to your business.
Pro tip: No matter what type of customer loyalty program you choose to start, make sure that it’s clearly explained to customers. You want to make sure that they know how the program works and what they need to do in order to earn rewards.
You also want to make sure that the rewards are something that customers will actually want. Otherwise, they’re not going to bother participating in the program.
How to increase average order value (recap)
These are just a few of the many ways you can increase your average order value. Experiment with different strategies and see what works best for your business. Remember, even a small increase in AOV can have a big impact on your bottom line.
Here are the 10 ways to increase average order value:
- Boost your website’s social proof
- Test out different website copy
- Make customer service your priority
- Include upsell options…
- Cross-sell options
- Bundle products together
- Add limited-time offers
- Use exit-intent popups
- Add a free shipping threshold
- Start a customer loyalty program
Don’t forget to track your results so you can see how your efforts are paying off. With the right approach, you can quickly boost your AOV and take your business to the next level.
About the author
Elmeri Palokangas is the founder of elmerpal.com, where he teaches on topics like advertising, ecommerce, and making money online. With rich experience in the ecommerce space (he started at 15 and failed literally a million times before finding success) as well as SEO and content marketing, he strives to share his knowledge with other entrepreneurs to help them maximize their sales.
The post 10 Practical (But Not Pushy) Ways to Increase Average Order Value appeared first on WordStream.