Shopify Ecosystem

How to boost your average order value

how-to-boost-your-average-order-value

As ecommerce professionals, we know that it all boils down to one thing: the sale. But, it’s also important to consider the average value of that sale, or your average order value (AOV).

Average order value

Increasing your AOV is one of the most effective ways to boost your overall revenue and profits without (much) additional work or spend on your part.

For example, if you spend an average of $10 per customer on marketing (your acquisition cost) and each customer’s average order value is $25, then that means your revenue is $15 per customer.

That’s cool. But what if each of those customers spent $45 instead? That would mean your revenue has now increased to $35 per customer. And all you had to do was optimize your average order value.

*Insert think emoji*

What are these optimizing techniques? Glad you asked…

Suggest upsells and cross-sells to boost average order value

Though these two tactics are different, they both come down to the same concept. Once someone has shown interest in a product, upselling (convincing them to switch to a more expensive model, for example) and cross-selling (suggesting that they add complementary items to their basket) work in a similar way. Here’s how.

When it comes to either upselling or cross-selling, you need to ensure two things are true: first, the items you’re recommending correlate to the items the customer has shown an interest in. And second, the price difference isn’t frighteningly large.

To the first point, ensure the items you’re recommending make sense. If someone is buying a BBQ, don’t upsell them a range oven. Offering them a grill set, cleaning tools, etc. makes perfect sense.

Secondly, if the shopper is buying a $699 laptop, you probably won’t convince them to upgrade to a $1,535 laptop because that $836 difference is more than the original cost of the laptop. However, informing them that a much better model is available for $815 or even $879 might be an easier upsell, though it’s never guaranteed.

Similarly, if your customer is looking to buy a silk blouse for $79, cross-selling them a suit for $560 doesn’t make sense. But suggesting they pair it with a gorgeous necklace and earring set for $24 could tempt them to make the additional purchase.

Develop product bundles

Another clever way to increase a customer’s spend is to automatically bundle up products that go together. This is more enticing to customers than buying each individual item since bundles usually come with a saving rolled in.

Buying that face wash? Why not pair it with a moisturizing lotion and charcoal face mask as well? Each item typically costs more when sold separately, but as a trio you can probably offer it with a 5% or 10% discount and see them fly off the virtual shelf.

Obviously, it’s important to determine a discount that won’t have a detrimental effect on profit, but the idea is to incentivize the customer to spend more per purchase, and buying three items instead of one is an easy way to do it.

Note that the items in the package or bundle should make sense when grouped together. Selling a red lipstick, face wash, and shower poof together isn’t exactly logical.

Oh and P.S.: your bundle can be a set of two items or a set of five items, there are no rules here.

Special thanks to our friends at Searchspring for their insights on this topic.
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