One of the easiest ways to quickly impact your brand’s revenue is to increase your average order value (AOV). Implementing some simple strategies could help you quickly improve your AOV and help you unlock faster growth.
When we review a prospective client, one of the first things we do is check their AOV and conversion rate. These two metrics, together, are a strong indicator of a brand’s ability to scale. As a benchmark, you want at least a $70 AOV and 1% conversion rate.
The higher your AOV, the more order is worth which means you can invest more in marketing. That’s why it’s so important to constantly be trying new strategies to improve your average order value.
Here are some ideas on how you could improve your AOV:
- Bundle Your Products
- Free Shipping Offer
- Include a Guarantee
- Limited Time Offers
- Promote Gift Cards
Bundle Your Products
Product bundling is a great way to increase your AOV. Bundling allows you to promote product sets, improve product awareness, and helps consumers see more of your product catalog. It also simplifies the checkout process and is a better user experience (versus adding each individual product to their cart).
We recommend you bundle together complimentary items and offer a discount to incentivize the larger order.
Depending on your platform capabilities, you can create personalized bundles or allow consumers to build their own sets. The added relevance will help increase conversion rate too.
Free Shipping Offer
Free shipping offers are becoming more and more prevalent and necessary. Most stores offer some kind of free shipping, if not expedited shipping. Consumers expect to be able to get things quickly and to not have to pay for shipping.
You can use the free shipping offer to improve your average order value (AOV) by creating a minimum order value before someone qualifies for free shipping.
We recommend you set the minimum order required to your existing AOV and slowly increase the amount needed for free shipping. As you increase the requirement, monitor your conversation rate to make sure the changes are not affecting your total checkouts.
Brands with a large product catalog can quickly implement and maximize cross-sell efforts. Cross-selling is when you promote complementary products. It’s similar to bundling, but it allows consumers to explore more of the catalog and add products to their basket.
You should create a cross-sell program that highlights products that work well together, are needed for maintaining the primary product, or that others have bought together. For example, if you’re a fashion brand you might want to show a shirt that could pair well with a pair of shorts the consumer is looking at.
We recommend implementing cross-sell messaging on the product page and after the consumer has added a product to their cart.
If you have multiple tiers of products (low cost, mid cost, high cost), up-selling can be a powerful tool for increasing your overall average order value. Brands can use up-selling to highlight higher tiered products to consumers, in order to convince them to purchase the more expensive product.
One simple way to improve up-selling is to highlight different product models on the product page. You might want to have a product matrix that highlights the core features each model has, allowing consumers to choose the product that makes the most sense for them.
Do not try to trick the consumer into purchasing the more expensive product. You want to make sure consumers are informed and choose the right product for them; otherwise you might be inviting a high return rate and poor customer reviews.
Include a Guarantee
When purchasing online, customers are taking a large risk (especially when purchasing from newer brands). The customer hasn’t seen or tried your product already and they’re trusting that your product description is accurate.
Customers are more likely to spend more if they feel confident that they’re protected, if something goes wrong or the product is not what they expected. Reducing risk for the customer can improve your average order value.
One way to reduce risk is to offer a money-back guarantee. We recommend bundling this with a free returns offer, to make the return process as seamless as possible. The more generous your guarantee or return policy is, the greater the impact.
Limited Time Offers
Limited time offers (LTOs) or flash sales are offers that only exist for a short time and drive urgency for customers to purchase. They are a great way to drive short-term revenue and increase your overall average order value.
When using an LTO to increase your average order value, structure the offer with a minimum purchase requirement that is larger than your current basket size. Consider offers like %30 off when you purchase $x amount, where $x * 70% is larger than your current AOV.
If you decide to move forward with limited time offers and flash sales, we recommend using them sparingly. The more you use them, the more customers start to expect sales. Over time customers will start to wait for the next LTO to purchase.
Promote Gift Cards
An often overlooked tool for improving your average order value is a gift card program.
Gift cards are great for increasing your average order value because consumers can choose how much they want to spend. It allows them to increase the order value without forcing them to purchase a second product they may not want right now.
Also, since consumers can choose the amount, it can be helpful when paired with free shipping offers or offers that require a minimum order amount. You could execute this by reminding consumers how much they need to order to reach the minimum order amount, and offer a gift card with that amount already loaded.
Once you launch the program, it’s important to be thoughtful in how you promote your gift cards. Consider messaging it on your cart page as an add-on.
Improving your average order value (AOV) over time is important. An improving AOV indicates that the brand catalog is growing, but so is consumer trust in the brand (the more they trust you, the more consumers will be willing to purchase).
Not sure where to get started? Book a call with one of our strategists, to see how you could improve your AOV and the potential impact that could have on your paid media campaigns.