As an EComm Queen, we know you started your business out of love, passion, and ambition… but you’re also here to make money, right? Of course, we would never say no to more revenue coming in! The biggest key to a successful online business is increasing your revenue. One of the easiest ways to increase revenues for an eCommerce business is to increase the amount customers spend on each order, also known as your average order value (AOV).
Average order value is the average amount each customer spends per transaction with your store. Simply put, it tells you how much revenue each order brings in. An easy way to determine your average order value is by using this simple formula:
Many people think that more traffic means more revenue, but it’s not always the case – sometimes traffic is more expensive and not as cost-effective. However, there are other ways to boost revenue by boosting your AOV. We are going to focus on 8 ways you can increase your average order value. Boosting your AOV is generally the cheaper way to increase your revenue, and it can be done in smart ways with minor changes on your site.
If upselling wasn’t already part of your marketing strategy, it needs to be! It is by far the easiest way to boost your AOV. A good upselling strategy doesn’t need to swindle customers into purchasing products that they don’t need. Instead, it should convince them of the reasons why they need the more expensive product, or why an additional product would make a great accessory to what they’re already buying. If your store is on Shopify, here is a list of all of their Up-Sell Apps that can help you implement new strategies on your website.
These kinds of programs encourage additional purchases because it just feels wrong to miss a chance for a discount! Plus, a rewards system helps you form a relationship with customers. There are different ways to structure a customer loyalty program, but here are a few examples.
Tier-Based Loyalty Programs: Tier-based loyalty programs add extra exclusivity and encourage an even greater spend. Everybody wants to be a VIP! Customers earn status or achieve levels based on how much they spend. As their status goes up they get more and more benefits. Benefits can include things like extra discounts, freebies, or early access to new products.
Cash Back Loyalty Programs: The only thing better than earning loyalty points is actually earning cash. I don’t know about you, but we think earning $10 for every $50 you spend is a super appealing offer.
One of our favorite loyalty apps is Growave, which you can read more about here. Members of our SheCom community even get an exclusive 30-day free trial!
Most shoppers come to your site and immediately search for the item that brought them in. So why not catch them on that product page with targeted recommendations? You can highlight popular products, related products, or add a Customers Also Viewed section.
Another way is to show customers pieces that complete the look for the item they’re interested in. Showing your customers a complete look allows them to buy it all at once. Putting together an entire outfit makes the job a lot easier for the customer. If a customer is viewing a dress, completed look products could include shoes, jewelry, and a handbag.
The beauty of bundle offers is that you can increase your average order value and your customers will appreciate the ease of having ready-made bundles to choose from. Here are a few examples to try out:
This technique is close to bundling, but shoppers have more options to choose from – think of it as if the customers are creating their own bundle. A great example of this is Victoria Secret’s mix & match offers on lingerie. Once customers find the styles that fit them best, they just go back for new patterns. It’s even more effective for your average order value if you combine this strategy with a free shipping offer that is a little higher than the price of your Mix and Match offer. For example, if your Mix and Match is $30 and free shipping comes at $50, customers will be tempted to pay $60 for two deals and free shipping.
Free shipping is one of the BEST ways to increase your AOV. Did you know that 57% of shoppers cancel their orders if shipping costs are too expensive? When customers are offered an incentive, there’s always an easy way for shoppers to justify spending more.
The thought process is usually: Shipping is $4.99. But I only need to add $5.50 to get free shipping. So, I might as well make another purchase while I’m here.
The best rule to follow when setting your minimum order value eligible for free shipping is the average order value + 15% or 20%.
Another discount you can offer is a freebie. Not many stores take advantage of this, so it’s more unique, and customers love a freebie. Just like free shipping, people are often won over with gifts even though they have to reach a certain order value to get it.
Creating urgency makes customers want to act soon. AOV is more easily boosted when customers see something like "last 3 in stock", "27 other users are looking at this offer", or "while supplies last" messages. This type of urgency creates Customer FOMO (fear of missing out). Human fear of missing an opportunity is typically stronger than the reasonable argument that you don’t need this right now.
When you go into a brick and mortar store, sales assistants always approach you. We know that this is sometimes annoying… But, let’s be honest, sometimes you genuinely need some assistance. Having a live chat on your website eliminates the chances of your customer having a problem, and abandoning their order, or not choosing to add more products to their carts. Once a shopper engages with a live chat employee and explains their problem, the employee can recommend a product that will resolve the shopper's issue. If your store is on Shopify, you can take advantage of Shopify’s partnership with Facebook to chat with customers via Facebook Messenger.
No matter what methods you choose to implement, increasing your average order value can help to boost your revenue without having to boost your traffic.
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