Influencing customers to purchase more items and spend more money is probably one of the hardest tasks for any eCommerce professional. Marketers often look to boost profitability by aiming to increase purchase frequency, as well as the Average Order Value (AOV).
AOV = Revenue / Number of Orders
Regardless of how successful your online store might be, here’s why it’s always important to consider the AOV whenever you’re implementing new marketing techniques or strategies:
- If you currently operate within a niche industry with limited traffic sources, then aiming to improve your AOV could be the difference between success and failure;
- It helps you to identify buying habits and further define your customers;
- Understand the Return on Investment (ROI) of your marketing investment;
- Improves your cash flow and future targeting.
Rome wasn’t built in a day, but here’s a few ways you can get yourself started and make a difference to that AOV:
Introduce a Free Delivery Threshold
If you currently offer free delivery across your eCommerce store you may have been successful in obtaining a healthy conversion rate, but you could still be missing a trick. Instead, try introducing a free delivery threshold that is around 15 – 20% above your AOV, as well as a message that appears in the basket to show whether the customer qualifies for free shipping; or how much they still need to spend.
Not only are they a great way to improve AOV, but product bundles centered around best selling items are perfect for retailers looking to add a touch of personalisation. With the assistance of a simple plugin, you can predetermine the customer’s buying habits and provide them with a bundle right before their eyes. Oh, and you don’t have to introduce heavy discounts either, just become a king of convenience.
Bulk Buy Discounts
Another attractive incentive is to offer a bulk discount depending on how many items your users are willing to purchase. To sustain engagement and profitability, ensure that you strike the right balance between discount and profit margin.
A proven method to increase average order value, which is often overlooked by many smaller retailers, is the introduction of a loyalty reward scheme. If you are able to offer a loyalty points scheme, users are likely to take advantage of it. They’re also an effective way of increasing brand loyalty and maximising repeat business opportunities.
Upsell, Upsell and Upsell!
According to ecommerce experts Shopify, up-selling on product pages is 20 times more effective than cross-selling. For those unfamiliar with up-selling, it’s a fantastic way of increasing the average order value by offering a similar but a much improved version of the same product. With up-selling, it’s important to create balance between product and price, as being too sales orientated can actually deter customers from purchasing.
Change Your Returns Policy
Believe it or not, purchasing behaviour can be influenced by whether you offer a free or an easy returns procedure. Essentially, customers are willing to spend more if your returns are free and easy. That doesn’t necessarily mean that they’ll return more items, it’s really just for peace of mind if they do need to return something. This is fundamental if you’re running an online clothing store where style, colour and size is everything!
If we take the Field of Dreams mantra “if you build it, they will come” and apply it to eCommerce, then it’s likely to result in success. Customers will always buy more products and spend more money if you can provide them with an easy, practical and relevant shopping experience. Consequently, this will dramatically increase your average order value overnight…well, within a few days at least!
- Test everything to discover which approach is right for you, your users and your business.
- Don’t forget about profit margins!
- Don’t do everything at once.
- Do remember the importance of the average order value.