Average order value (AOV) is the average amount spent each time an order is placed. It is calculated by dividing your total revenue by the total number of orders placed in a certain period.
The higher the AOV, the more revenue you will be able to earn from the same number of customers. In other words, you can increase your bottom line without having to increase your sales or marketing budgets, as you don’t need to bring in new customers to increase revenue.
Here is what you can do to incentivize website visitors to spend more per order:
1 Enable Upselling With Attractive Product Bundles
Offering product bundles is a great approach to significantly increasing average order value. The key is in creating bundles that will be clearly valuable as well as interesting to customers.
Your goal is to ensure customers feel that they’re getting a better deal. Essentially, you’re playing with a bit of FOMO. You want them to avoid missing out on the opportunity to snag the bundle, even if they may not have wanted to purchase all the products.
This is also a great way to “get rid of” products that are not selling a lot.
How you create the bundle will entirely depend on your business and the interests of your customers. You can create bundles from products in the same category, but you can also bundle products from related categories.
Aim to cater to a specific customer segment with every bundle.
Let’s look at a bundle that features a couple of discounted items. The EcoFlow solar generator shown below from Shop Solar Kits comes with either one or two extra batteries. Each bundle clearly displays how much you save: 26% in both cases, but the actual dollar amount is also shown.
This is a great way to highlight the amount a customer will save. While percentages are nice to see, it’s the actual cold figure that helps customers decide. The bundle itself makes perfect sense, as the extra battery clearly provides plenty of added value to the kit.
Source: shopsolarkits.com
2 Integrate a Third Party Payment Plan
Offering a flexible payment plan to your customers can also help you increase your AOV. It helps them overcome a common conversion obstacle of payment security and provides the opportunity to buy more of what they want while still staying within budget.
Options like Afterpay and Klarna both work well. Afterpay claims that 83% of their users see increased conversion rates, while Klarna claims that users have increased conversions by 44%.
They will reduce the perceived cost of a purchase, thus increasing the likelihood that shoppers will purchase additional items. That’s especially likely if shoppers are exposed to interesting offers with your bundles and cross-selling tactics.
Check out this female dress form product page from Mannequin Mall. It offers four interest-free payment installments with shopPay and provides different payment samples as well. This payment option is listed right next to the price. That way, customers will immediately know that they can break up their payments significantly, making them more likely to make an additional purchase.
Source: mannequinmall.com
3 Draw Attention to More Expensive Options
To increase your average order value, sometimes you need to point out the more expensive option. Customers will naturally gravitate toward the cheapest payment or subscription plan. However, if you make the more expensive one stand out, they will notice it first.
For this tactic to work, the more expensive payment plan needs to be the best choice for the majority of your customers. You need to be clever with your design and UX tactics and highlight what it is this more expensive plan provides that they want and need.
Let’s analyze an example to see how this strategy works. Bay Alarm Medical has three different pricing tiers. The middle one is labeled the “best seller,” and the way it has been highlighted will instantly draw the eye there.
But that’s not all. The brand has also made sure that this package makes the most sense. They give you free shipping and a free month with it, and they’ve also crafted the table so that there are significantly more benefits shown in the second package compared to the first one. The difference between the bestseller and the most expensive package is not nearly as noticeable.
Source: bayalarmmedical.com
4 Make Cross-Selling as Easy as Possible
Cross-selling is selling related, additional products based on a customer’s interests. The most often cited example is convincing a customer to buy a pair of socks to go with the shoes they came in to buy.
Cross-selling provides an obvious way to increase your average order value. By offering additional items, you are incentivizing a shopper to buy something else they weren’t originally planning to get.
The trick to cross-selling lies in the quality of the product recommendation and the ease of purchase.
Firstly, you need to recommend products that go well together and that are most likely to interest each individual customer. “Other customers also bought” or “popular items from the same category” are both great ways to upscale your cross-selling efforts.
You also need to ensure it’s very easy to buy these additional products. The process usually involves opening several new product pages (which will usually open in the same window unless directed otherwise, so there will be a lot of back and forth involved) and adding each item to your cart individually.
For a great example, check out the pitching net page below from Anytime Baseball Supply. It suggests two other items that can be of use and gives you their price, along with the option to select which variant you want. You can then add both of these products (plus the one you are currently looking at) to your cart with one click.
Source: anytimebaseballsupply.com
It’s super simple and guaranteed to inspire shoppers to make that extra purchase, especially when the product recommendation is a smaller item, like a glove or ball.
5 Offer Subscription Purchases
If you sell any type of consumable items that are regularly used, like food, drink, or even cleaning supplies, it can be of huge help to your customers if you make any future orders extra convenient (and potentially more affordable).
A simple subscription option can go a long way in both lending shoppers a hand and increasing your average order value. Shoppers will commit to a larger order, but they will only have to pay for it in the future, so the commitment won’t seem as big.
Plus, they won’t have to remember to order an item in the future: it will be delivered before they need it. Add to that the fact that they’re able to save with a subscription bundle, and they are even less likely to miss out on the opportunity.
ATH has taken it a step further and lets you customize the size and frequency of your order. Look at their Natural Pre Workout order page. It lets you place a one-time order or subscribe to regular deliveries. You can choose how often you want your order to arrive and how many items you want. If there are several of you taking the supplement, you can save by ordering a 2-pack.
Or, you can set up a 1-pack delivery once every three months if you know you only use this particular supplement rarely. The offer is highly convenient and economical.
Source: athsport.co
6 Offer Obvious Discounts on Larger Orders
Offering bulk purchasing options is another tactic you can use to increase average order value, provided that there’s also a discount involved. If it’s a significant and rather obvious one, customers are more likely to be hooked.
Note that this will work best for non-perishable items that often get used. Selling large orders of coffee, which has a longer shelf life, will certainly work better than selling bulk cartons of milk. However, it can work magnificently for things like toilet paper, batteries, or sticky notes — anything that is used daily but can’t be reused.
Somnifix sells mouth strips, and they’ve nailed discounting large orders. They have a very nice element on their product page that shows exactly how much you save in percentages and dollars when you order the larger pack.
The highest they go is offering a year’s worth of strips. While this is certainly not the option first-time users will go for, those who have tried and loved the product will certainly appreciate the 30% discount. They are much more likely to place a higher-value order.
Source: somnifix.com
7 Offer a Free Shipping Threshold
Offering free shipping on all orders is an excellent way to boost conversion rates. However, establishing a free shipping threshold is a brilliant way to also increase average order value.
It will incentivize customers to place additional items in their cart to qualify for free shipping. This is especially true for customers who would need to pay a higher shipping rate and who would obviously much rather have more products to enjoy than nothing to show for the money they spent.
It’s important to get the threshold right, though. To calculate it, start with your most common order values (not your average order value). For example, if most people place orders around the $50 mark, it will make sense to place the free shipping threshold at $75.
Also make sure to take into account how much you will need to pay for the shipping, as it won’t magically be free for you as well. If you increase your AOV but end up spending significantly more on shipping, the tradeoff won’t be worth it.
You want to make it attainable for most customers. If you set it too high, you will see lower conversion and higher cart abandonment rates.
Colourpop, for example, has a domestic shipping threshold at $30 and an international shipping threshold at $60. This is attainable for most of their customers, and it lets them purchase either a couple of items or a product bundle to qualify.
Source: colourpop.com
8 Implement a Customer Loyalty Program
Customer loyalty programs are a great tool for both brand building and customer retention, but they also help increase AOV.
If you set it up right, you can easily encourage customers to spend more per order. You can:
- Offer free shipping to members with lower thresholds or when they reach a certain tier.
- Make the perks so enticing that people will want to qualify as soon as possible.
- Offer discount codes that expire at a certain time or that only apply to larger orders.
H&M has a great loyalty program that gives $5 for every $200 spent. Customers naturally want to get the discount, so they will often add an extra item or two to their cart just so they can save on a future purchase of a more pricey item they’ve been eyeing.
Add to that the brand’s great cross-selling and time-limited offers, and you get the perfect formula for increasing AOV.
Source: hm.com
Wrapping Up
Before you start implementing any of these methods, take some time to analyze your current sales funnel and website. What are you already doing (and how well is it working), and which of these tactics can you easily implement? Note that they may not all work equally well for every business, so you might need to make some tweaks.
