Top Tips for Increasing Your E-Commerce AOV
It’s no secret that average order value (AOV) is an essential metric to track for any online business.
But if you ask an online retail store owner what website metrics they’re actively working to improve, you’ll likely hear some combination of: website traffic, conversion rate, or revenue.
However, by increasing your average order value instead of just trying to win over new customers by driving paid traffic to your site, you can get more value out of the customers you already have. Meaning you can grow your business without having to invest heavily in additional marketing and advertising to drive more unqualified traffic to your site.
Why is Average Order Value Important?
Average order value (AOV) ia a measure of the average dollar amount spent every time a customer places an order on your website. To calculate your website’s AOV, divide total revenue by the total number of orders.
Average order value is an often overlooked, but incredibly important metric for ecommerce businesses to pay close attention to. AOV provides a window into the purchasing behavior of your customers, and that information can be used to improve the effectiveness of your overall marketing efforts and pricing strategy.
Improving your average order value of your website will have a direct impact on your sales margins and profit, while also providing you with critical insights into the behaviors and buying patterns of your audience.
Top Tactics to Improve Your Average Order Value
Cross-sell complimentary products
There’s a reason why grocery stores always position the snack aisle next to – or very close to- to the soft drinks aisle. Smart merchandisers understand the importance of stocking complimentary items together. The same rule should apply when designing an ecommerce store.
For example, someone who’s purchasing a candle lantern will likely be interested in buying some candles too. Someone shopping for kitchen storage solutions may be tempted into a new kitchen gadget to go with it. Don’t leave it up to the customer to remember everything they need when shopping on your website. It’s your job to help them out.
Cross-sell every chance you get. For every item you sell, come up with add-ons and recommend them to your visitors. Cross-selling isn’t just a product page or checkout tactic. It’s a helpful service you provide. Do it consistently and watch average order values respond to your helpfulness.
Offer a limited-time promotion
Limited-time offers are a simple and often very effective approach to increasing average order value.
You know how it goes: you’ve been eyeing that new line of trendy wool sneakers since they were released last month, but can’t justify spending $150 on tennis shoes. Fortunately, you just received an email announcing a flash 50% off discount on the exact pair of shoes you’ve been eyeing.
Will you buy the shoes? Of course you will, and you’ll probably get an extra pair of laces and insoles while you’re at it. Do you need the shoes? Maybe not, but how could you pass up a deal like that?
Make no mistake: the limited-time offer is a powerful sales tool that can help you improve your average order value, if executed properly.
Here’s are some ways you can utilize limited-time offers to encourage a higher average order value:
Set your free shipping threshold higher than your AOV.
Get shoppers to stretch a bit. Adjust the free shipping threshold to encourage customers to add one or two more items to their cart for free shipping. Would you rather spend $40 and pay for standard shipping, or spend $50 and unlock free shipping?
Use countdown timers to build on the sense of urgency.
Countdown timers can be an effective method to build urgency and increase conversion rates if they’re used correctly. Don’t be intrusive, be helpful. If free shipping is only available before a certain time, implement a countdown timer to let customers know that.
Leverage price anchoring.
Don’t just show the item you have on a limited-time discount for $199, show a similar item alongside it for $499. Anchoring prices with comparisons will help shoppers realize the price they’re being offered isn’t so high after all.
Amplify social proof throughout the customer experience
Leveraging social proof on your website can be a surprisingly effective method for improving average order value. Think about it from the perspective of the consumer…
You’re standing in front of the ice cream display at your local grocery store trying to figure out which one to choose, when someone walks up, grabs a certain brand quickly, and says “This stuff is amazing.” There’s a good chance you’ll listen to that person and grab a container of the ice cream they recommended.
We all tend to trust our peers more than we trust brands. Every ice cream company will say that their product is the best, but when a fellow shopper confirms that claim, you’re far more likely to believe it. So, for your website:
- Make liberal use of customer reviews on your pages
- Include specific to the item product reviews from customers on product pages
- Encourage customers to submit testimonials and reviews
An e-commerce store that’s sprinkled liberally with customer reviews is on the fast track to success. If you have one satisfied customer, there’s no reason you can’t have testimonials on your website. Make getting reviews testimonials part of the customer journey – always send a follow-up email asking how the product was a few days after purchase.
Upsell a better (or higher-priced) item
Upselling is a time tested method for increasing average order value, and it’s widely used by both traditional brick and mortar retailers and e-commerce businesses.
When you’re buying coffee filters at the grocery store, why would you buy the 50 filter pack when you could just as easily spend an additional $5 and buy the 150 filter pack? Upselling is at work in more aspects of your everyday life than you might think.
Upselling seems to work well for retail stores, so why not utilize it on your e-commerce website? When a person is in a buying mood, your job is more to provide additional items to buy than to encourage the shopper to buy.