Ecommerce – Increasing Average Order Value
AOV Tips and Tricks
When focusing on increasing profit across the board, AOV (Average Order Value) is highly important to consider. AOV is an average of the amount that shoppers spend per visit. Increasing this value can increase profit, which is more important than ever in the wild competition that is internet shopping. As a statistic, AOV is objectively one of the most important, as it can provide business owners with an idea of how customers are shopping and who exactly they are. Through this, decisions such as product pricing and the finer tuning of advertising campaigns can be worked out better. It is also no coincidence that top competitors have higher AOVs on average.
By optimizing and specializing certain site features, it is possible to give customers the feeling of winning, while simultaneously earning your business more profit. By following some simple tips related to AOV optimization, your business can accomplish this.
Financing on Purchases
An interesting choice to consider offering customers is the ability to pay for goods over time. Setting up payment plans for certain products makes them seem significantly more affordable. It can also easily change a “no” to a “yes” when it comes down to clicking the add to cart button. Not only does it make purchases easier, but it also allows for more purchases overall. Affirm is one such way that businesses can offer financing to customers. Businesses in partner with Affirm see an increase of over 70% in AOV as a result of this system of financing. Customers see exactly what they owe, without any hidden fees. They can also choose to manage it over different periods of time, through 3 month increments.
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Minimum Purchase Amount
Minimum purchase amounts work similar to free shipping thresholds. However, they differ in that it is applied to specific products. For example, the store wants to clear out a certain stock. You can run a sale that applies a deal to it, on the condition of a certain cart value. This can make customers add more to cart from the discounted stock, boosting AOV.
Upsell Similar Products
Let’s say you have a customer looking at a product page. They are pretty much ready to go through with their purchase of the item. However, they then spot a similar product, with the same functionality. But in one way or another, it’s better, and respectively more expensive. At this point it will be pretty darn difficult to say no to the better option. Since 2006, Amazon has shown to make over a third of its annual revenue in upselling. The trick to successfully upselling however, is doing it carefully. That means better product placement only in places where it makes sense to do so.
Cross Sell Matching Products
Cross selling works similar to upselling, where in you are offered other products. However, instead of offering more expensive products, suggested options are complimentary to the purchase. Cross selling isn’t the most effective method of boosting AOV, but it still has its pluses. Customers usually go into a purchase already having known what they wanted. That doesn’t mean it is completely useless though, as complimentary products can be a necessity in some cases.
Focus on Repeat Shoppers
According to a study done by Adobe, of all Ecommerce traffic, about 8% comes from repeat buyers. Which seems small right? But that 8% manages to spend an amount that equals a whopping 40% of online revenue. That’s why a good way to increase AOV is by marketing to these “shark” consumers. Customers who come back to your site after previously making a purchase have some sense of trust and loyalty with your business. For this very reason, they are likely to spend near 3 times as much a brand new customer is.
Selling in Bulk
KPMG, an international professional services network, performed a study about internet shopping habits. Consumers that they surveyed told that their biggest reason for shopping online is due to convenience. After that, is being able to easily compare prices, and then it’s finding online sales and deals. One of the ways to meet the wants of consumers knowing this, is by offering discounts based on volume. Giving discounts to products purchased in multiples can easily increase AOV, however it has to be implemented correctly. Only certain items will be really purchased in quantities of more than one. Think in terms of everyday household items. You can encourage shoppers to buy more of these products by displaying the amount they’d save. This is likely to give them the “push” to add more quantity to cart, effectively boosting average order value.
People never want to feel like they missed out. That’s why it can be wise to sell items that are available only for a limited amount of time. Likewise, create flash deals. All of a sudden things like a certain percentage off, but only for a few days. This has an effect on customers, making them choose to purchase immediately and in bigger quantities, rather than pushing it off or canceling their order. For this reason, this can be a huge momentary boost to AOV.
Browser History Based Shopping
Sites can base suggestions to products on browser history. For example, a customer had been on your site before, but for one reason or another exited. Now that they are back, chances are they want to make a purchase. Showing them products they had previously browsed can be the sufficient edge needed to push them to making a bigger purchase.
Making shoppers feel like family is one of the best ways to increase loyalty and as a byproduct AOV. Reward them for different kinds of purchases, and they will be much more likely to come back and spend more. One such option is creating loyalty programs. Give shoppers reward points or cash back on purchases. Programs such as these create an atmosphere of familiarity and trust with a brand. These points can then be redeemed on future purchases, with a conditional minimal order value. This will undoubtedly boost AOV because by then customers will be 2nd timers, and as the statistics show, they spend significantly more.
Follow these tips to boost average order value, an important site metric. High AOV is usually a good indicator of site performance and can help in other areas. Using tools like Affirm can tremendously help in boosting AOV.