AOV is calculated using the sales per order.Average Order Value = Revenue Generated/Number of Orders
Follow these tips for marketing:
Discount on minimum purchase
Most online businesses have planned sales and discounts during a particular time of the year. While you must be already providing a certain amount of discount, improvise it to increase the AOV of your business. Something like 10% discount for $100 purchase and 20% discount on $200 purchase. This way, if a person is buying a product of say $150, he would rather prefer buying another item to avail the 20% discount.
Strategies Free shipping
Calculate your current AOV, and then select items/orders priced above it and provide free shipping on them. You can also use free shipping as leverage: entice customers to make purchases of a certain value to avail free shipping. According to a study by Deloitte, “40% of customers are willing to buy more items to avail free shipping offer”. Providing free shipping will surely help in increasing the AOV of the online business.
Limited period offers
When an online business offers an offer for a limited period, it drives a FOMO (Fear of missing out) effect on the visitors. This creates a sense of urgency among the buyer which tends to result in higher number of purchase. 20% off will drive customers to your website, but if you market 20% discount for 24 hours, it compels the customer to take immediate action.
Volume discounts
Offer discounts on bulk purchase. This will lead your customers to buy more products and will increase the average order value of the website. Club those products that people would prefer buying in bulk and provide a discount on the total value. Make sure you provide the discount after deducting the profit margin.
Up-sell
If planned strategically, upselling is one of the best ways to increase the average order. Let’s explain upselling by an example: If a customer is looking to buy a smartphone with 32 GB internal storage, but spots an ad for a 64GB phone at a slightly higher price. Engage your customers the right way, and they might increase their cart value. Upselling is simply offering a better and a bit more expensive product to the customers.
Cross-sell
Suppose a customer is purchasing a 64 GB iPhone X. Now, he would also want a back cover, a protective screen glass and maybe, a headphone set too!
Selling additional product(s) along with the original purchase is known as cross-selling. Businesses should keep in mind that they showcase relevant suggestions with the product. A person buying an iPhone for $1,129 would not prefer to buy another item which is also expensive. Place items that are lesser in price and will be needed by the customer.
Provide incentives
When you give something to the customers they usually return the favor by being loyal to your brand. Whenever they make a purchase with your brand, give them reward points, gift voucher or cash back offers. But make sure you add a clause that the offer is redeemable for the next purchase. This way you will not only increase the average order value of your website but also make customers loyal to the website.
Do’s and Don’ts while strategizing AOV
- Make sure you do not implement all these techniques together.
- Perform A/B testing to check which strategy suits you the best.
- While implementing these strategies, keep a balance between the discount offered and the profit margins.
- Plan well before you implement any of these techniques for your online business.
Use the Power of Smart Recommendations and Other Such Techniques to Improve AOV
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Finally
Your online business has acquired an ample number of customers; it is time to focus on increasing the value of orders by those customers. The above-mentioned tips and techniques will help you in increasing the average order value of your online business. Focus on ensuring that one customer buys more products from you rather than many customers making just one time purchase. Having 1000 consumers buying an average of $10 worth products is similar to having 100 consumers buying $100 worth products. But the latter scenario would consume 10 times fewer resources & time, which will ultimately reflect some very positive changes in your ROI sheet.
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