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Lesson 2: How to Increase your Average Order Value (AOV) and why is it important?



Average Order Value (AOV)

Hello there! Average order value (AOV) is an often-overlooked metric in the digital business world. It has a huge impact on the total revenue of an eCommerce business. At first, we need to know about the encouraging matter - increasing AOV is not rocket science, and it does not require a degree in molecular physics. The tips we will discuss in this article are simple and easy to implement. Let us take a look at how your company can see a significant increase in profits by increasing the amount of money spent by each of your customers.



Table of contents Contents:




Chapter 1: Simplify and customize the process of order placement.

If it's difficult for customers to configure their orders or see how order changes affect price, you may be missing out on higher-level values. Many online retailers allow customers to refine their orders at a very low level of detail. This process often increases the value of the order because choosing a higher quality material or a specific design has a higher price. However, if your site's order customization process is cumbersome, you may find that customers are reluctant to add extras that will increase order value. On your eCommerce site, try to implement the functionality that allows shoppers to add extra features to their order, making it incredibly easy and even fun to use. This approach is a great way to encourage buyers to customize their orders and add optional, more expensive extras. You can map up the whole ordering process; customers will be more likely to buy if they know what awaits them next. For example, they can fill in any necessary information regarding shipping, orders, or payments before placing an order and taking the actual obligation to pay the money for the ordered products. Reshape and rebuild the ordering process, and it will take a considerable impact on your AOV.

  • Personalized shopping makes customers more interested in your brand.

  • Customers are less likely to abandon a cart or a checkout. It’s simple.


Chapter 2: Offer Free Shipping

Contrary to what you may think, delivery can be a significant part of the cost of buying a product online, especially if it is a cheap item (under 30€). Offering free delivery above a certain threshold (stores usually set this threshold at 100€/200€ gross order value) may encourage adding another product to the basket, especially when the current order summary is close to the mentioned limit. To encourage your customers to do more shopping, place a counter in the shopping cart indicating how much is missing to get free delivery. Such a simple solution can be very motivating!

Offering free shipping will also prevent any suspicious and unwanted situations during checkout. Nowadays, free shipping is becoming widely available, and it is considered a common thing. In the countries where the eCommerce market is widely available, the lack of free shipping can be considered as a disservice to your customers. This is especially important in the first phases of starting the business because it will be easier for the customers to believe in your developing brand and stand out from the crowd. Including free shipping to your business is surprisingly easy. You just need to incorporate the shipping costs into the product price, but do it wisely and do not make it too high, focus on the strategies of acquiring more orders. More orders sent to the same place will easily cover the shipping cost of the bundle!

  • Free shipping prevents failures during checkout

  • It encourages the clients to buy more products, increasing AOV.

Chapter 3: Offer gifts

Here the principle is practically the same as in the case of free shipping. If you set a specific threshold above which customers will receive an additional gift to the order, you can expect that the number of people who reach this threshold will increase quickly. For instance: If you want to "reward" a customer who just bought a TV set for 1000€ with free batteries for the remote control, don't expect spectacular results. The gift should be adjusted to the value of the order, but done in a proper way, gifts can skyrocket the AOV among customers. Moreover, satisfied clients are more eager to buy at your shop next time.

  • Gifts are an easy way to increase AOV

  • Gifts enhance the probability of reselling


Chapter 4: Start the loyalty program

Customers are more likely to leave more money at stores that offer them participation in loyalty programs. This is because they hope for additional discounts and freebies in the future. It is worth considering implementing a loyalty program in your store. You can encourage customers to collect points that can be redeemed for vouchers, discounts, and gifts at a relatively low cost. Users during review writing often admit that they bought the product because of information provided by the loyalty programs. This means that loyalty programs simply work and have a real impact on the volume of orders placed by your customers. Loyal customers will be more eager to buy again, motivated not only by the number of points but also by the entire experience around the brand. Therefore, the best programs are not just about rewards but are the glue of the entire user experience. Effective loyalty programs are those that illustrate the very meaning of the word "loyalty" and show what values the brand expresses and how it influences the benefit and favor of customers.

  • Loyalty program makes reselling more possible

  • The number of the orders is greatly enhanced when the customers are loyal


Chapter 5: Provide the easy returns and clear return policy

Easy returns are very important to the customers. If you provide an easy way to return ordered products - customers will be more willing to order more because they will have a sense that the possible withdrawal from the purchase will not pose too many difficulties for them. Quick and easy returns can be done via agreements with shipping companies. However, it can be challenging to the developing businesses because of the prices when the total volume of the orders is low. Still, it will eventually pay off in raising the buyers' trust and loyalty. To achieve this, make your return policy as plain and simple as possible because the amount of time and money consumed by inappropriate return policies can be overwhelming for the business. Statista's most up-to-date statistics show that return deliveries cost businesses $550 Billion between 2016 and 2020. Awareness about the returns and refunds is a crucial element in increasing both the loyalty of the customers and the AOV itself. The fewer returns, the more successful orders you have. It is clear that your business's revenue will also go up to the moon and beyond!

  • A clear return policy establishes loyalty and trust

  • It reduces the number of returns and refunds


Chapter 6: Cross-Sell your Products

Cross-selling is a sales technique involving convincing a customer to buy a product related to the one they have just bought or intend to buy. This could be a popular related product or a required accessory that is not initially included with the product being purchased in online stores; cross-selling is typically implemented on a section shown as the part of a product page. Cross-selling suggests products mostly to users that they would have bought anyway - but would have done so elsewhere later. Cross-selling will increase the value of the shopping cart and increase customer satisfaction - having learned about additional products, they can purchase them right away, saving time and effort. You're encouraging your existing customers to spend more money - and it doesn't require much effort on your part. You can increase the value of the shopping cart without any additional expense. Moreover, your customers may not be aware of all the products offered by your brand or online store, and because of cross-selling, they will get to know about them, promoting products that were unknown before.

  • Cross-selling improves sales and profitability.

  • It also helps to promote unknown products and cut off the sales costs. Provide a clear call to action during checkout


Chapter 7: Upsell Your Products

The idea of up-selling is like the idea of cross-selling. The method of upselling is based on increasing the value of the product being sold. Using this technique aims to persuade the client to buy a good of a higher quality, better class, and thus - more expensive. Its application is also very simple - during the process of sales, the customer is offered better, more advanced versions of a product. He gives improved or higher quality versions, emphasizing the advantages of such and no other customer choice. This technique requires observing the customer and getting a feel for what versions of the product they are willing to accept. Successful upselling will boost both the AOV and the company's revenue because of more expensive orders being placed. Well performed cross-selling means selling the right product to the right buyer and satisfying his actual or artificially created needs. While the use of cross-selling has no risk - the customer has already made a purchase, inappropriate use of up-selling may cause the customer to resign from buying a more expensive version of the product, considering for example that the price of such a “premium league” product is too complicated for him.

  • Upselling will allow selling more expensive products to a client

  • It is a simple and efficient technique widely used in eCommerce

Chapter 8: Reduce customer acquisition costs are and Customer service

This is the most important piece of advice written in this article. Perhaps the most obvious way to increase your cart value is to offer good quality products at reasonable prices depending on the target audience. Regardless of the techniques written above, eCommerce is still commerce, but with the electronic layer standing behind it. Core rules are the same – offer the products that will satisfy the customer's needs. If the offer meets the needs, the product is bought – plain, authentic, and simple! Lastly, be fair and play fair as trust is the most expensive asset in business. Earn it to earn money.








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