5 Ways To Increase Your Average Order Value
Increasing your AOV (Average Order Value) is not only great news for your eCommerce growth, it can also help shape key business decisions such as your online store layout, product pricing and delivery.
Knowing your AOV can give you insights into your how your customers shop online and helps you predict how much revenue you can expect from a certain number of visits to your site.
To find your AOV, just calculate your revenue divided by the number of orders and hey presto! You’ve got your AOV.
There are a number of techniques you can use to increase your AOV, all of which can be done in Magento, and don’t require a lot of developer know-how.
1. Product Bundles
A really simple technique that makes shopping easier for your customers. And when shopping becomes easier, they are more likely to buy.
Product bundles involves making multiple items, that are relevant to each other, available on one page. This allows the customer to select them all at once and save themselves time.
For example, if you have a customer looking at buying a Barbie Playhouse, you could bundle this together with a Barbie Doll, Barbie outfits or dollhouse furniture.
2. Free Delivery
The Delivery Matters survey conducted by Royal Mail in 2016 revealed that 46% of customers expect no minimum spend to qualify for free delivery, and 29% would rather switch to another retailer who does offer it in order to complete their purchase.
That’s nearly half of your online customers expecting free delivery. So what if you don’t, or can’t, offer it?
If you can afford to offer free delivery, then you should, as it can really improve your AOV. However, if budgetary concerns mean you can’t offer free delivery across your entire site, then you must play it smart.
You can offer Free Delivery when customers reach a minimum spend on their order, or offer it only on selected products. This way you can choose items with a wider profit margin which can easily absorb the cost of the shipping.
Another option is to offer Free Delivery on Returns. This is a particularly attractive option for online clothing shops, allowing customers to try on at home and only keep the items they like.
It is also worth using A/B Testing here as it can help you to determine how to structure your delivery charges and when to apply free delivery to products.
When customers are on your product pages, they have moved past the informative stage and are now looking to buy.
This is your chance to entice them to a higher price purchase with an attractive Up-Sell, which in turn will increase your AOV.
Up-selling is basically showing your customer a similar product to the one they are currently looking at, but at a higher price point.
Spotify is a great example of this from a service point of view. They offer their free service, alongside their premium one, showing the customer clearly the advantages of paying more.
However, be careful with what you choose to add into your Upsell space.
Don’t just chuck in any more expensive product and expect the customer to blindly follow. Customers are more savvy to online marketing techniques than ever before and only natural up-sells are likely to achieve success.
4. Customer Rewards
Customers love an incentive, and when they think they are getting something extra for free, they are more likely to buy.
Promotions and rewards are two ways you can increase your AOV by encouraging your customers to spend more.
They also encourage customer retention and turn new customers into regular shoppers.
There are a number of types of loyalty schemes you can implement:
- Point System – the more often a customer buys from you, the more points they collect which they can use to gain free gifts or perks
- Tiered Loyalty – depending on how much and mow frequently customers spend with you determines the rewards they receive
- VIP Club – Customers like feeling that they’re getting something that others are not and that’s where VIP or Exclusive Members Clubs can work in your favour. Customers pay an upfront charge and in return get benefits that other shoppers don’t
- Sweepstakes – Reward loyal customers with a chance to win every time they shop with you. This is a great option to go for if you have a strong social media following as customers are more likely to share images of their prizes with their own followers
5. Personalisation & Recommendations
Having a strong base of returning customers give you great insights when it comes to boosting your AOV.
If you know their purchase history and shopping habits, you can utilise personalisation and recommendations to your full advantage.
When a customer arrives at your site, you can show them products you know they will be interested in, based off what they have bought previously. Amazon is just one of the many eCommerce stores already implementing this feature:
You can also personalise the page so that only relevant products are shown. For example, a female customer who only ever buys women’s shoes from your website is unlikely to be interested in men’s pants.
Customers respond well when presented with products and offers that meet their specific needs. The more relevant the offering, the more likely they will buy.
In Summary – Keep It Simple
You don’t have to have a lot of fancy gimmicks to get your customers to shop with you – just keep it simple:
- Make the shopping experience easy
- Make it relevant to them
- Make it personal
If you adhere to these three principles when applying the techniques laid out in this article, you’re sure to see the results in your AOV.