7 Ways to Increase Average Order Value for eCommerce

Last updated on July 26, 2018

To be honest, normally we keep our focus on following three ways to increase an eCommerce business

  • Customer acquisition – driving more traffic.
  • Customer retention – retain customer to increase purchasing frequency
  • Increase average order value – encourage the customer to purchase more while shopping.

Among all three ways, this article is focused on the third way i.e. Increasing average order value (AOV) for the eCommerce business.

You are spending money on driving all-important traffic to your website and making extra efforts at increasing your eCommerce website conversion rate. But until and unless you see any improvement in your sales and revenue, they shouldn’t be your focus.

Most of the marketers overlook the area which is very important to increase average order value(AOV) of your eCommerce your business.

Why Increase Average Order Value?

We understand that driving all that important traffic to your eCommerce site is not easy and cheap. It takes a lot of gallant efforts and manpower to get those traffic. Such as digital marketing, SEO, guest articles, press releases etc.

The major question here is, will all those traffic you attract going to convert?

Here is the fact for you, most of the new traffic you attract with your effort is not going to convert.

Research shows 99% of the initial customers are not going to purchase and 97% of the overall online transactions are abandoned. At the end, you’re going to get only 1% of that traffic converted which doesn’t count for much in your eCommerce business.

All those engagements for the traffic are magnificent, but unless you gain something from that effort it’s not going to be a good deal. What count at the end are the comments, reviews and share and some revenue for your online business.

We’re not saying these efforts you make for your site are in vain. They’re valuable for widening your marketing plans but you should also think about the gain for you in terms of cold, hard cash.

Therefore, what we suggest here for you is to be focused on you AOV to increase your revenue with the help of easiest and quickest solution.

You may be thinking why average order value (AOV) is such a great strategy? Here are a few reasons,

  • It’s efficient and quick, you don’t need to work on complex marketing plans and lengthy research phases.
  • You can easily convert your new prospects without optimizing your current marketing plans.
  • It helps to secure your online business against your traffic dips.
  • It has been proven that AOV helps to generate up to 35% of e-Commerce business revenue.
  • And most importantly it is simple to implement with a touch of an idea.

Let’s get down to the methods that have proven to successfully increase your AOV and should uplift the value of your online business.

Free Shipping Threshold

You may think giving anything away for free is the wrong decision if your intention to increase your revenue. Offering a free shipping to your customer could still be a huge dent in your overall profits. However, if you work on free shipping thresholds correctly you’ll offset the delivery price and should help in increase in revenue.

Let’s clear this method with an example. Let’s say the average order value of your site is $45 and for delivery is $5. Here you can prominently display a message for your shoppers purchasing $45 mark showcasing them that adding another $10 product make them eligible for free shipping.

This way, if your customer continues to take your advice you’ll have your revenue increased for that order by $5.

Here’s an example of an effective free shipping threshold implementation.

free shipping threshold

Before moving to checkout displaying how much a customer has to spend to qualify for free shipping will provide a smoother journey for the consumer.

Shipping costs are one of the major reasons shoppers abandon their cart at the verge of making a final purchase. Thus, offering free shipping helps in both increasing the average order value as well as stopping shoppers from abandoning their cart.

Discount on Minimum Purchase

Discount on minimum purchase works similarly as the free shipping threshold does.

You can always offer shoppers $10 off on any $50 or larger purchase. This way you can easily generate an AOV for more than $80. That is a significant way to increase your online business’s regular AOV.

It’s a tactic you’ll see everywhere from local markets to online e-Commerce sites. Here’s an example of discount on a minimum purchase from one of our customer.

discount on minuimum purchase

For your revenue improvement, you want to sell as many products as possible. But, every time asking your customer if they want to spend more money is not going to be feasible for you. You need to improvise, sweeten the deal for the customers with discounts or free items to spend more.

This way you will be able to increase your average order value and customer gets a discount or free items with their purchase.

Cross and Upselling Campaigns

Let’s say cross-selling and upselling are two of the most overlooked methods for increasing revenue. But if you can use it wisely and effectively it will be a great help.

Cross-selling campaigns offers a customer an option of complementary products based on their current cart activity. For example, offering a belt with the purchase of new jeans.

Upselling helps to encourage the customers to increase their spend by upgrading to a better product. For example, you can recommend a laptop with better visual and graphics to a customer who is currently using CRT monitor.

You’ve seen cross-selling tactic on eBay with their “People who viewed this item also viewed” section.

cross-selling campaign

This tactic has been proven successful for eBay and is reported to be responsible for 30% their overall revenue.

And for upselling, the gadgets will be the best examples. You can see different products next to each other along with their specifications and price. Here’s the example of Apple iPad’s series specifications.

upselling campaign

Therefore, if both cross-selling and upselling tactics are used well, you can easily increase your online business revenue.

Before applying the cross-selling and upselling techniques always keep in mind that,

  • your recommendations should be relevant to the initial products
  • offer reasonable deals.

Always give Limited Period Offer

Shoppers always try to procrastinate or delay the purchase decisions.

For, this you need to lure your customers to make the final purchase by adding a limited duration to the offer. This way you can create the sense of urgency among the customers and encourage them to buy more on this duration.

For example, You are giving 25% off on all products and your customer might get motivate the shoppers to browse the products. This shows no sense of urgency to the customers and they might buy whenever they want. But when you say “Get 25% off on all products for next 3 days”, it compels them to act right away.

limited period offer

Compelling your shoppers to act right away with exclusive deals makes the both parties win/win situation. Not only customers get to purchase on discount but also you can increase your average order value and revenue.

Package Deal

Sometimes a complementary product to any item is not going to be enough.

When a complementary product does not hit off the deal then the package deal comes into effect. Sometimes your customer needs the whole package to get themselves up and effective on the day of delivery.

For example, a fish store might sell fish aquarium, fish food, toys, fish materials and fishnets separately for each for $15 each.

When one product is added to the cart then the customer is presented with an option to get all other items for $50 instead of $15 each. Here, if the customer decides to take the deal you are providing then you’ve successfully increased the value from $15 to $50. Here for the customers, they have everything they want for the fish and also get the 20% discount.

package deal

You need to be careful here because you need to provide customers with an appropriate package deal. Also, think about whether the products your customers are browsing would be fine with a cross or upsell recommendation.

Social Sharing, Proof

You can use social sharing as a proof for encouraging customers to buy more by establishing confidence in their purchase.

With social sharing, you will be able to add reviews of other shoppers, expert endorsements, guests/ celebrities or a recommendation from a friend.

Here the basic idea is to earn an amount of trust that retailers gain from returning shoppers on the very first purchase. You can achieve this by encouraging the shoppers to share products and purchases and highlight product reviews.

product review

Incentivize the Purchase

You always need to take good care of your customer and eventually, they will merely return the favor.

You should make efforts to redeem your customer. Such as whenever they make the purchase, provide them with rewards, cash back, loyalty card, gift vouchers or anything they can use for their next purchase of a minimum order value.

These gratifications you provide will help you in the best possible way to increase your average order value and also the online revenue.

Wrapping it up

Along with increasing your average order value for the business, you also need to be careful about how it’s affecting your customer experience. Making too much emphasis on AOV may lead your customer to move away from your brand and straight to your competitors.

You should always keep in mind that short-term may lead to more money but in the long run it’s your customer experience and service that makes the revenue.

All the above methods we have mentioned are for increasing the average order value while helping your customer experience. Once you find the balance between these two factors, you will eventually see both the revenues and customer satisfaction on the rise.

Make sure you have some insight about customer psychology at the time of raising your average order value. This way your efforts to increase revenue will be more valuable.

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