8 Ways to Increase Your Average Order Value

Improving Average Order Value

Average order value (AOV) is one of the most crucial metrics for successful ecommerce stores.

Why?

Often, business owners and marketers will focus on lowering customer acquisition costs in an effort to increase profitability.

If I could just decrease my CPA by 20%, I would at least breakeven…”

But what if there was an additional lever we could pull to boost profitability? What if we didn’t even need to lower our customer acqusition costs?

That’s where average order value optimization comes in

In this post, we’ll share 8 of our preferred methods to increase average order value – and show you how you can, too.

How to Calculate Average Order Value?

The average order value is calculated by dividing the total revenue by the numbers of orders placed.

It represents how much gross revenue, on average, each order brings in.

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In other words, if over the last 30 days you made 30 sales for a total of $900, your average order value (AOV) would be $30.

Why You Should Care

In a few words, if you increase AOV, your revenue will be higher.

It’s that simple.

The longer version is that when you increase AOV, you’re able to more effectively offset customer acquisition costs, which means you can afford to pay more for each new acquired customer.

In short, you’ll make more money out of each customer with no added costs.

Great, right?

So how can we increase average order value?

1. Minimum Order Value for Free Shipping

It’s well known that unexpected shipping costs are one of the biggest causes for cart abandonment.

In fact, according to a study conducted by DigitalCommerce360, 68% of consumers reportedly abandonded their purchase due to shipping costs.

Talk about a buzz-killer, huh?

However, a different study also stated that 58% of consumers added more products to the cart so they could get free shipping.

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The bottom line is that people will go to great lenghts to qualify for free shipping – even if that means adding more products to the cart.

So one of the most straightforward options you have to increase AOV is to set a minimum order value in order to qualify for free shipping.

With all that said, proceed with caution.

As mentioned, added checkout costs can often result in abandoned orders. There’s a chance that the added shipping costs will lower conversion rates, so you’ll want to be careful with this approach.

You don’t want to increase AOV in detriment of less sales.

2. Upsell Products

Upselling is a great way to encourage your customers to buy more expensive products within each order, which will increase average order value.

Take this example of upselling:

You get an order for a 50 ml face cream. You have 2 upselling opportunities here:

  • The 100 ml bottle of the same cream
  • A 50 ml bottle of the new (and more expensive) version of this cream, that now includes a new and better ingredient.

Both options are an upgrade of the original product, and both result in a higher order value.

But timing is everything, and knowing exactly when to upsell can increase your chances of success.

2.1. In-Cart Upsell

Upselling in the cart, before customers finish their order, gives them just enough time to make a switch and opt for the suggested product.

2.2. Upsell on the Thank You Page

You can also upsell on the thank you page, after your customers finish placing their order.

It sounds strange, right? How do you upsell if the order has already been completed?

Truth is, with over 80% of abandonded carts worldwide, it’s important to make sure we’re not too aggressive with our upsells before users have finished their purchase.

The solution?

Sell them again after they’ve purchased.

If you’re on Shopify, there are tools like Zipify that make it easier than ever to try this out

3. Bundle Products

Product bundling is another well-used strategy to increase AOV.

It consists of bundling two or more products that add value to the customers and offering that bundle at an appealing price.

Appealing. That can mean different things to differente people, which is why you need to get to know your customers to know what entices them.

If it adds value to the product they were planning on buying, chances are they will choose the bundle.

For example, if you sell shampoo (4$), a good idea for a bundle is to add a conditioner (4$) and hair mask (6$).

And to make that bundle more appealing, throw in a discount and offer the 3 products at a lower total price than they would cost if bought separately. Both the conditioner and the hair mask add value to the shampoo because they are products often used together.

This is the general idea behind bundling, but there are many ways to bundle and you should do it in a way that’s right for your product/service.

4. Cross-Sell Products

Cross-selling is often confused with upselling.

Even though they are somewhat similar concepts they represent two different strategies.

That said, cross-selling is the suggestion of a product that is complementary to the product being bought by the customer. As opposed to upselling which tries to offer an upgrade of the product bought.

So, in the previous example of the face cream, a cross-selling opportunity would be to suggest a face cleanser to go with the cream. Both products are staples in any skincare routine (as every woman will tell you) and complement each other perfectly.

Instead of a face cleanser you could also suggest an eye cream, a toner, etc. All of them are complementary products, often used together.

Much like with upselling, you can use plugins for cross-selling.

5. Down-Sell Products

If upselling means upgrading the order, down-selling means downgrading it.

It sounds counterproductive, right?

Why would you want to make an order cheaper?

It is, however, an effective strategy to employ on those customers who go all the way to the end of checkout and quit before they cross the finish line.

By down-selling, you show them an option that’s cheaper than the option they were contemplating buying. Its price will make it more appealing than the original product and they might make a purchase after all.

Sure, the order value will be lower than it would originally, but better one bird in the hand than two in the bush. And, this way, you will have acquired a customer who you would have lost otherwise.

6. Add Incentives for Bulk-Buying

In order to encourage customers to buy in bulk you need to give them something in return.

“Buy two, get one free” is one of the most commonly seen bulk-buying incentives.

We’ve all come across similar advertisements or in-store promotions.

But you don’t need to give anything away if you don’t want to, you can simply offer a discount.

“Buy two and get the second item for 50% less” is a good example of that.

7. Use “Buy Now, Pay Later” Payment Gateways

Don’t let money be an issue.

If you want your customers to order more, help them by providing the option to pay later.

This is made possible by payment gateways like Sezzle, Square and Klarna, for example.

The way Sezzle works, is it collects the money from the customer in installments, starting at 25% at the time of the purchase, but transfers the full amount to the producer upfront, minus their own fees.

The rest of the money it collects from the customers’s card in three, 25%, installments.

There is no interest or extra fees added to these payments so there is no downside for your customers. Instead, it increases their purchasing-power and entices them to buy more at a time, which increases your average order value.

The other payment gateways work in similar ways. You can offer several payment options, through several different gateways, or choose the one that you feel is best for your business.

8. Showcase Top-Sellers

Your top selling products are, as the name suggests, you crowd favorites, the ones that people keep coming back for.

As your most popular products they have the highest probability, out of all your products, of piquing the interest of your customers.

Also, the fact that a product is chosen and bought regularly and by a lot of people, is almost a testament to its quality and ability to satisfy the need for which is was made.

So, by showcasing your top sellers, you might be able to entice your customers to increase their order both in quantity and value.

Closing Thoughts

A lot of shop owners fall into the mistake of assuming that if their physical stores work well, then their online stores will as well.

But it’s not that simple.

A carefully thought out ecommerce strategy is the key to the success of online stores, and having a high average order value increases your store’s revenue and gives you more room to spend money on customer acquisition.

More Customers = More Money, and so the circle begins.

So, what are you waiting for?


Do you feel like you’ve tried everything but your average order value is still falling short of expectations? Reach out and we’ll help you out.

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