How to Increase the Average Order Value for your Ecommerce Store

Increasing average order value

Increasing the average order value of your website is an important goal for any business looking to maximise profits and gain a competitive edge. To achieve this goal, you must know how to analyse your current average order value (AOV) and then discover ways to increase it. That’s what this article is all about!

Analysing Your Average Order Value

To analyse your current average order value, there are a couple of baseline pieces of information that you need to collect and assess. You need to know the total revenue generated in a certain period of time, as well as the total number of orders made within that same period.

You can also get more granular with these metrics and consider the average order value from different sources and/or by individual customers. This granular data can help inform which tactics will increase your average order value.

Use the following formula to figure out your average order value:

             Total Revenue                         = Average Order Value                                             

     Total Number of Orders

By analysing your current situation, you will be one step closer to understanding how to effectively increase your average order value.

Understanding Your Customer

It is important to understand your customers if you want to increase your average order value. Knowing who your customer is and what drives their shopping behaviour will help you create strategies to encourage higher spending.

To get started, begin by building a profile of your typical customer. Consider demographic information such as age, gender, location, income, etc., that can be used to describe them. Additionally, consider their psychological traits, such as the values, attitudes and beliefs that guide their decisions.

Once you understand your customer persona (or personas), look into their lifestyle and needs that drive their decision to purchase from your website. What do they need to solve and how can you help them? When you identify why they’re buying from you, then you can craft more effective marketing messages tailored to their needs.

Lastly, consider the different channels that your customers use when interacting with your brand. For example, are some channels more successful in driving repeat purchases or higher average order values? Knowing which channels your customers prefer will also help you craft more relevant marketing messages.

Cross-Selling Strategies

Cross-selling strategies are one of the best ways to increase a website’s average order value. Cross-selling involves selling additional related products to customers in order to increase their total purchase value. This can be done by either increasing the number of items or encouraging higher-priced alternatives (upselling). For example, an online electronics store might suggest that a customer buy a carrying case for their newly-purchased laptop or bundle a wireless mouse and keyboard with a computer.

Another great way to increase average order value is to promote the sale of complementary items such as jackets, hats, and scarves to accompany a new pair of shoes. Many companies also incentivise customers by offering discounts when they add additional items to their cart.

Offering Discounts

Discounts and special offers are an effective way to entice customers to spend more on your website. Therefore, it’s important to craft discounts that are attractive to your target audience without devaluing your overall product.

You could offer time-limited discounts on specific products or services, or discounts for returning customers if they buy additional items. You could also consider offering discounts for buying in bulk or offering exclusive discounts to members. If you have loyalty programs in place, consider rewarding customers for their loyalty with exclusive discounts.

You could also create discounts with certain conditions attached, such as free shipping if customers purchase more of a certain product, or a free gift if they buy more than one item. Offering special bundles or packages can also be an effective way to increase your average order value by pairing multiple products together.

User Experience

User experience (UX) plays an important role in increasing the average order value of a website. It is essential that customers have a pleasant, efficient, and easy shopping experience while browsing. This requires a well-designed website that is intuitive and easy to use.

Usability testing is key for improving the overall UX of a website. It helps identify any major issues so that changes to be made quickly to the website. Finally, businesses should make sure that their website design is mobile-friendly. Consumers increasingly rely on mobile devices for online shopping, so your website must be optimised for mobile users to be successful.

Customer Relationship Building

When customers feel like they have a relationship with a particular business, they are more likely to come back for more. This is especially true for e-commerce stores where customers don’t have the opportunity to interact directly with the company.

Tools like targeted emails, loyalty programs, discount offers, and social media campaigns can make customers feel special and appreciated. By sending out personalised messages or special offers relevant to their interests, customers will begin to form a deeper connection with your business.

For example, an e-commerce store could send out an email thanking loyal customers for their past purchases and offering them a promotional code or special offer on their next order. This could help them feel valued and increase their chances of returning to the store.

Personalisation also helps to build trust, as customers feel like the business is being attentive to their individual needs. This increases their likelihood of purchasing more items at a higher value.

Automated Tools

Using automated tools such as AI chatbots or product recommendations can seriously improve the customer experience. AI chatbots, for example, can answer customer queries quickly and efficiently, allowing customers to get the information they need without having to wait for a response from customer service. Product recommendations can also be incredibly helpful for customers who don’t know what they’re looking for – AI-driven algorithms can look at past purchases and browsing behaviour to offer tailored suggestions that your customers are more likely to be interested in.

Increasing the average order value of your website is an important business goal that can have a significant impact on profitability. By understanding your customer base, providing meaningful offers and discounts, improving the user experience, and utilising upselling and cross-selling strategies, your business can effectively increase the value of each purchase and create more loyal customers.

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