Tip to increase your average order value
The average order value (AOV) is an eCommerce strategy, which is calculated on average for each product placed in a particular time with a merchant. AOV is one of the most significant strategies for online stores to be responsive to drive key business decisions such as advertising expenditure, store layout, and product pricing.
Why Average Order Value is important?
Knowing your company’s average order value helps you to calculate your overall online marketing strategy and pricing efforts by giving you the statics needed to measure the long-term value of individual customers. AOV helps you to assign goals and strategies and evaluate how well those strategies are working.
Sometimes marketers focus much of their energy on increasing traffic to a website when it would more impactful – and profitable – to increase their AOV. Boosting traffic costs money in general, but increasing AOV does not.
As there is a transaction cost related with each order, raising your Average Order Value is a way to drive direct revenue and increase your profits, as the customer is already purchasing from your store.
How to calculate your Average order Value?
To calculate the average order value of your company, divide the total revenue by the number of orders.
Average order value = Total Revenue/Number of Orders
Here are some of the steps that you can follow to improve your average order value
#1 Using Upselling and Cross-Selling
Upselling is the process of encouraging the customer to buy a high end product whereas cross-selling is the process of recommending the customer a related or complementary product. Product recommendations can help you increasing your AOV
• Recommend popular related products
• Store best sellers product or your brands most favorite products
• Cross-sell similar products
#2 Limited time offer
Create a sense of urgency to your customers. When a customer find this type of announcement, it will definitely create an urge for the customer to buy the product
• Add a limited time to your offer and make sure it’s prominent in the call to action
• Urge some customers to not lose the chance and jump on the sale and purchase more in one visit
#3 Free Shipping
Free shipping will always attract a customer and it will tempt them to make a purchase. As a result automatically the average order value will increase
• Set a minimum order value for getting coupons, free shipping or free gifts
• Encourage customer to purchase more products from your store, so that they can avoid paying for the shipping cost
#4 Bundled Products
Bundled product is nothing but offering two are more products combined as one product for sale. More than single products, bundled product sells faster and attracts lots of customers.
• Product bundling is a smart tactics of selling a group of products as a package deal at a discount price
• Gain upsell by promoting any specific product in a bundle
#5 Use Social Proof Tactics
Social proof can be used as a medium to encourage customers to buy more products by insisting confidence in their purchase decision like reviews from other users, expert endorsement or recommendation from a friend.
• Add a notifier application to your website to announce your shop purchases, showing the product that was purchased previous by someone and the reviews about the purchased product
Using these metrics will help you to improve your AOV. As the Average Order Value increase, automatically the revenue of the shop will increase.
If you are new to Ecommerce business, you can hire an Ecommerce solution provider to boost your Average Order Value.
If you are looking for an Ecommerce Solution Provider, contact us anytime.