3 Ways to Boost Average Order Value

Tracking the revenue you receive from an average transaction, your Average Order Value (AOV) is one of the most important metrics for any online retailer, especially those with a relatively small set of products or services to sell. Like many metrics, AOV may seem to be set in stone, but is a lot more adjustable than it initially appears. 

By taking the right approach, you can significantly improve your AOV, making each and every interaction you have with customers just that little bit more profitable. 

Depending on how you operate, this can have some major ramifications – previously unprofitable marketing approaches suddenly become vital traffic sources, you may be able to justify higher budgets, you may even be able to invest more in product development and quality.

In other words, maximizing your AOV should be a major focus, particularly because it’s often a lot easier than you might initially think. Here’s 3 effective techniques to develop your AOV, some ideal for eCommerce stores, others suiting a Direct Marketing approach, and some offering benefits for anyone who starts using them. 

Utilizing Upsells and Downsells

When a customer completes their purchase, don’t just say ‘thank you for buying’ – make them a deal. The precise details will look very different depending on the products and services you offer, but an upsell typically gives the customer a chance to buy a new product, or to increase the number of products in their order, at a discounted, incentivized rate. 

If you’re not offering upsells upon purchase, you’re almost certainly missing out. There’s not really any potential downside for adding an upsell to your system: you’ve already convinced the customer to buy, and now you’re taking it further by offering them a one-off saving.

While not every customer is going to take advantage of your upsell, some will, driving up your AOV, particularly once you start split testing offer types. 

A simple upsell isn’t the only option you should be testing. If a customer rejects your initial upsell, offer them an alternative deal – a downsell. Again, even the most basic offers can have a huge positive impact for your AOV, without any kind of negative feedback.

Establish Offers for Minimum Purchases

Why should your customers order more? For most eCommerce traders, the answer is fairly basic – they want the extra products, and there’s not really any other reason for them to increase their order value.

Give your customers a reason to buy more. Free shipping is an ideal example: it’s something that customers want. In 2015, a survey estimated that almost half of online shoppers would be willing to pay a little extra in order to get free shipping for their order. Take advantage of this. 

Understand at what point free shipping becomes economically viable for your business. Depending on your profit margin and scale, this may vary drastically – for some, a $50 minimum makes sense, while others may have to push it significantly higher.

As you’re aiming to boost AOV and profit, this point should be above at least a large portion of your orders: if around 20% of your orders are in the $30-35 region, you may want to consider offering free shipping above a $40 level, for example. 

This kind of simple incentive gives your customers a reason to spend more with you, rewarding them for spending extra.

Change Your Default Product

If you offer several different product sizes or service levels, it may seem intuitive to default to the lowest-priced, most basic option. In reality, this may damage your AOV. Basic isn’t always best. 

Try switching out the default option in your selectors, so customers reaching checkout are initially presented with a more valuable package, instead of the basic level of your product/ service. 

That said, there are several best practices to consider here. Psychologically, people tend to gravitate towards a medium option when presented with a cheap, moderate and expensive set of choices. Typically, you’ll achieve the best results when you default to your medium option, rather than the cheapest or highest-priced options.

Once you’ve changed your default, you can use it as a way to boost conversion rates. If you’re offering a discount for larger packages, highlight the savings that the customer is making by selecting this option. For service packages, focus on the extra features that come with the new default package. Make it clear that the customer is getting a great deal, and you’ll improve both AOV and CVR.

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