5 Ways to Increase Your Average Order Value

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If you’re looking to increase the revenue of your online store, you can do it in a number of ways. Most online merchants choose the volume approach, meaning they try to increase the number of products or services sold to (most of the time) separate customers. But trying to increase the average order value (AOV) might work even better: if you’re selling more to the same customer, you’re saving in quite a few areas of your business as well, ranging from shipping expenses to the cost of ink and paper for printing invoices. There are multiple roads you can take to increase your AOV, but some of them seem to be worthier to take than the others. So here are five ways which we think are certainly worth a try if you’re looking to increase your AOV, revenue, and (hopefully) profit:

1. Free Shipping

According to Deloitte, 71% of online shoppers are planning to take advantage of free shipping this holiday season. For online merchants, it means that offering free delivery is becoming an essential part of business, as it not only can increase the average order value, but is also necessary to attract most of the prospective customers to even consider shopping there.

RJ Metrics recommends three ways to implement free shipping into an online store. Firstly, you can set shipping thresholds, meaning customers have to spend a certain amount to qualify for free delivery. According to Deloitte, 40% of customers will spend more to get the products delivered for free, so it’s certainly a good option if you’re looking to increase your AOV. Secondly, you can offer free shipping on a certain combination of merchandise or deliver the whole cart for free in case a customer purchases a particular item. Lastly, limited time offers for free shipping might not only increase the number of orders on calmer periods, but boost the AOV as well, as customers know they’ll have to pay for shipping in case they want to buy something else in a few days or weeks.

2. Product Bundling

According to KISSmetrics, one of the best ways to increase your AOV is to offer discounts when buying multiple products at once. You can combine a few relevant items yourself or you can leave the mix and match option to the customer, but receiving a considerable discount might just be the factor which drives the customers to buy more at once.

Bundling can cause some inventory challenges since you may sell items separately or as part of a bundle. Don’t worry about that if you’re using Ordoro to manage all your orders though, as our kitting functionality allows you to bundle products and keep your inventory count accurate at the same time.

3. Volume Discounts

It depends on what you’re selling (people probably won’t buy two same car parts when they need just one), but offering discounts depending on the amount of products bought can also considerably increase your AOV. For example, Paperstone, an office supplies company, offered their customers different prices if they bought more than 5 or more than 10 boxes of A4 paper. According to Visual Website Optimizer, it resulted in the online store’s AOV increasing by 18.94%.

KISSmetrics points out that it’s also very important to clearly show the exact amount of money that the customer might save if they’re buying in larger volumes. In fact, it’s true for all the incentives mentioned above and below – if you let the customers know that they’re eligible for free shipping only just before checking out, you’re losing on a lot of prospective purchases. Although it can certainly be a very nice surprise!

4. Cash-backs and Vouchers

Another way to increase your AOV recommended by Visual Website Optimizer is cash-back offers when the customers spend a certain amount shopping in your store. You can offer such deal to anyone who comes to the store or your previous customers only (presenting the voucher as a gift on checkout), but it works the same either way: for example, if the customer spends at least $50, they get a $5 discount on the whole shopping cart. You can even offer different cash-back levels, increasing the amount saved with every spending threshold ($12.5 on $100, $30 on $200, etc.).

5. Social Proof

People tend to hesitate spending a lot of money in an online store they barely know anything about. So unless you’re selling some well-known merchandise, you might need someone closer to the customer to influence them to spend more, consequently increasing your AOV.

RJ Metrics lists a few ways to influence the customer to buy more by using the opinions of other people: user reviews, celebrity endorsements, and recommendations from friends. According to Reputation Labs, 89% of people trust online reviews, meaning several positive ones near your product might sway them to buy it. In addition to that, Bazaarvoice notes that the AOV of customers who read reviews is 6% higher than of those who don’t. So a review system certainly seems to be worth implementing. While celebrity endorsements might not be cheap and are suitable only for some lines of business, apps and toolbars that let the customers shop together with their friends can boost the AOV up to 50% according to DecisionStep.

In conclusion, we have to note that there’s only one way to know what will or won’t work for your customers: testing. You’ll have to do plenty of tests to understand how many freebies and discounts are plausible when trying to increase your average order value. After all, a higher AOV isn’t the final objective, as it doesn’t necessarily increase your profit as well. It usually does though, so it might be a good idea to try at least a few from all the things listed above.