Getting site traffic and keeping in pace with fast-changing Google algorithm for page ranking are one thing while increasing average order value (AOV) for your eCommerce site, is altogether, another world of challenge. Increase in AOV means avoiding additional expenditure to attract new customers, rather an increase in overall revenue. Here are the industry-best practices that you can implement to up your AOV in a short span.
Average order value = Total revenue / No.of orders taken
Free shipping is a proven strategy to increase AOV and it works almost every time. Having a threshold for free shipping encourages customers to spend more than they actually planned. Setting the right threshold value is important, ideally, it could be up to 15% of your average shipping cost and AOV put together. You can always test the strategy, but be careful to not keep the threshold too high, which may cause a negative effect in your conversions.
Yes, discounts are as old as commerce itself. Yet, discounts continue to help buyers spend more. Discount with minimum order value is the wise strategy while volume discounts can also be profitable. Discounts can also be combined with loyalty programs where customers who spend more, are eligible for greater benefits via discounts or free shipping. Devising this kind of discount strategy requires thorough research on customer’s spending habits and purchase motives.
Cross-sell and upsell
Cross-sell can motivate customers to buy items in combination with each other. Show a pop-up of recommended products from a different category that can fit or match the products selected by the customer. This can motivate them to buy more, therefore increasing your AOV.
Gift cards are a great way to motivate customers to repeatedly purchase from your store. Instead of providing gift cards for current purchases or free shipping, provide them for the future purchases thereby reducing your ad expenditure. Your AOV will increase even if the gift card value is less because, customers tend to use the gift card and sometimes, spend more than the gift card value in their next purchase.
During slower periods, time-sensitive deals create urgency and help increase conversions drastically. Use time deals like ‘order within 24 hours for a free gift card or free shipping’ to encourage customers to quickly decide on their purchase. Discounts on first 100 orders or so, will also help.
Games and contests
Announce big prizes and encourage customers to participate in your games and contests. The ideas to motivate the customer to buy more for increasing their chance to win the big prizes. This will directly increase your AOV. Do make sure you reward the customers with prizes as promised.
Now, you have read the best practices to increase your average order value, it is recommended to use them one by one with an A/B testing strategy. This will help you understand which best suits your brand and products. Also, keep your profit margin as a top priority and then roll out the discounts and other offers. The Commerce Shop can help not just in increasing your AOV, but high conversion rates and the site traffic needed for your business to grow fast. We offer the best of both worlds i.e., eCommerce and development, so its all under one roof. Contact us