How to Increase Your Ecommerce Average Order Value

By Nicole Baldivia

Friday, August 28, 2015

Many online businesses focus on increasing traffic to their websites and that is certainly a sound strategy but many also fail to pay attention to raising the Average Order Value, or the amount of money that customers spend when shopping on their sites.

Working on increasing AOV can benefit your business by increasing your cashflow and is a good strategy to complement campaigns to raise online traffic, which can sometimes cost you extra because of advertising and promotion costs.

How can you increase your Average Order Value? Sometimes, all you need to do is give your customer a better deal or offer them items that they didn't initially think they wanted to buy.

1. Promo bundles

By offering customers a bargain for complementary products, you have a chance of selling them more than they planned to order. You can, for example, sell peripherals for an item like a pair of hiking boots in a bundle or starter pack.

By offering items like socks, hiking gear, and hydration packs in your bundle that will cost less than if the items were bought separately, the customer can get a discount while at the same time increasing your AOV.

You can also give customers an option to mix and match items in a promo bundle. Maybe your customer already has a hydration pack but needs a sturdy fanny pack or tactical pants. With this option, you are more likely to sell more than just the hiking boots that your customer was already planning to buy.

2. Rewards for first-time shoppers

You can also increase your chances of making a sale with a first-time shopper by offering a small discount on their purchase. You can, for example, offer a discount of $10 for first-time customers who buy three items worth $50 each, or three pieces of a certain item.

The idea is not only to make it tempting to make that first purchase, but to make it a good idea to maximize the first-time shopper's discount by buying more than one item.

3. Free shipping for a minimum order value

The cost of shipping can often cause a potential buyer to hesitate on clicking the order button. By waiving shipping and handling fees for purchases above a certain threshold, you remove the customer's hesitation and increase your chances of making a bigger sale.

After all, a customer is more likely to buy more items to save on shipping than to buy them individually.

Although this may seem like you are throwing away money, this strategy can actually work if you do the math right. For example, if your current AOV is $30 and shipping costs around $3, setting the threshold at around $40 will mean you do not lose that much money on shipping. In fact, you get to keep more money than would have gone to your shipper anyway.

4. Cashback promos

You can also offer customers more value for their money through cashback promotions through gift cards, vouchers and electronic coupons.

For example, you can offer them a $10 voucher that they can redeem on their next purchase when they buy products worth $40 or more. Just knowing that they have store credit on your site will make them more likely to buy again to redeem their $10.

Setting up a rewards program where customers can accumulate points and exchange them for in-store credit or special items will also help raise AOV and encourage repeat purchases.

References:

- http://blog.hubspot.com/marketing/tips-increasing-average-order-value
- https://blog.kissmetrics.com/boost-average-order-value/
- https://vwo.com/blog/increase-ecommerce-average-order-value/