As a business owner or marketer, your knee-jerk reaction to increasing revenue might start with getting more customers. Don’t get us wrong, generating new leads is an essential part of growing your business, but it’s far from the only viable strategy.
Instead of thinking about how you’ll sell to new people, maybe it’s time to think about how you can convince your existing customers to spend more during each visit. Your average order value, or AOV, represents the average amount of money each person spends when completing an order on your site.
The easiest way to figure out your AOV is to use this formula:
Gross sales / # of orders = average order value
So, if you made $10,000 last month between 500 people, your average order value is $20. Now, if you convinced each of those 500 people to spend $35 instead of $20, your monthly sales jump up to $17,500! That’s quite the boost!
There are plenty of ways you can boost your AOV. Today, we will share several strategies you can use to gradually increase how much shoppers spend when they buy from your online store.
Offer Free Shipping
Free shipping is one of the quickest and most effective ways to increase your AOV. We’ve all placed an order on a website, only to get hit with insane shipping fees on the checkout page. Many users choose to abandon payment forms for this reason.
You can convince more shoppers to go through with their order by making it clear what they need to do to get free shipping. Let’s quickly reference the example we used above. If you show customers that they can get free shipping if they spend $35 or more, you can bet that a portion of your customers spending $20 would pay more to avoid additional fees.
If you sell a service instead of a physical product, you should consider including fees and taxes on your pricing page. Shoppers are more receptive when they see a flat price instead of a long list of service fees and taxes on top of the base price of your service.
Upsell and Cross-Sell
Next, let’s talk about how upselling and cross-selling can help you increase your AOV. You’re likely familiar with this strategy if you’ve ever shopped on Amazon. At the bottom of each product page, you can see a list of suggested products, usually under the label “frequently bought together.”
What you’re seeing is cross-selling in action. The products under this label usually complement the first product in a meaningful way. For example, if someone wants to buy football pads, a seller could suggest cleats since the two go hand-in-hand.
Think carefully about the products and services available on your site. Odds are, two or more of your products have synergy and thus more value when purchased together.
You can experiment with this strategy by including cross-sell, upsell, and wholesale options on your product page. Review your analytics account and learn how consumers responded to your offer, and make changes over time.
You’ll find that by embracing cross-selling and upselling, you’ll have plenty of new opportunities to boost your AOV.
Reward Customers for Their Loyalty
Another great way to convince customers to spend more on your site is to reward them for shopping with your business. We like to use social media and email marketing to reach our existing customers with exclusive promotions and offer a cash-back program that helps them rack up store credit when they place an order.
These systems allow us to stay in touch with our audience and reward customers for engaging with our brand. A point-based or cash-back program can help increase your average value because customers are likely to spend more than their reward points.
For instance, if your AOV is $20, and you give your customer earns $10 in reward points, there’s an excellent chance they will buy 2 different $20 items because of the initial savings. As a result, your AOV can quickly go from $20 to $30.
We also suggest sending personalized offers to your existing subscribers. Research shows that 80% of shoppers want more customized promotions and content from their favorite companies.
You can easily accomplish this task by segmenting your leads and creating offers that align with your audiences’ goals and pain points. Think carefully about how you can appeal to each buyer persona with an eye-catching promotion or loyalty reward. Properly segmenting your list can lead to a 14.31% boost in your open rate, which means more people will make it to your site and place an order.
Make it Easy to Find Answers
Finally, you can skyrocket your AOV by making it easy for customers to find answers on your website. There’s a good chance your visitors want to spend more when they place an order, but they have a few questions about your products, services, or company as a whole.
You’ll want to make sure that your blog is jam-packed with helpful guides and tutorials that explain how customers can use your products to improve their lives. When you consider that 47% of shoppers read 3-5 blog posts before placing an order, it’s clear that your content marketing strategy can determine your AOV.
A robust FAQ section that addresses common questions or concerns can also help you secure more sales and improve the average price per order.
You should also streamline how your customer service system works for customers. In many cases, this will mean using a hybrid system that includes both chatbots and live chat.
We’ve found that this strategy offers the best of both worlds. Customers with common questions can quickly find answers with your chatbot. Those with complicated queries can talk directly to a live agent and get their issue resolved. Studies show that 63% of people are likely to return to an online store if there’s an option for live chat. In other words, stepping up your customer service strategy can help you increase your AOV and retention rate.
Back to You
As you can see, there are quite a few ways to strategically boost how much people spend when they shop on your website. We outlined a few of our favorite tips today, but we only scratched the surface. However, if you use the advice outlined today, and there’s a good chance you’ll start to notice an increase in profits, sales, and engagement.
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