Do you have a lot of traffic in your online store, a high conversion rate, your sales are increasing, but the profits are not meeting your expectations? What is happening? What can you do to fix it? You should surely work on increasing the average order value (AOV).
In general, once you get a good conversion rate, the next step is to increase your website’s AOV from the traffic you already have to get customers to buy more products or choose items. more expensive with each operation.
You do not know where to start ? Below you will discover some of the best strategies for increasing the average value of your basket and take your virtual store to the next level.
What is the average order value?
The AOV “Average Order Value” represents the average amount that a customer spends for each purchase in your virtual store. the average order value It is important so that you can understand the purchasing habits of your consumers and, in addition, it helps you in the pricing strategy and in the development of your online marketing measures.
The AOV not only shows how many users are interested in your store and how many of them have made a purchase, it also provides an exact metric for determining a customer’s long-term value.
As you can see, AOV is a valuable KPI for your business. But do you know what data you need to take into account to calculate it? And above all: which formula to apply? Find out below.
How is it calculated?
It is very simple! First of all, you must have these 2 data:
- Total amount of sales belonging to a certain period that you want to check (1 month, 3 months, etc.)
- Number of orders placed in your store during the same period.
Now with this information you apply the following formula:
AOV (%) = total turnover / number of orders
The result of dividing total silver sales by the number of orders in the same period is, on average, what customers spend in your store each time they place an order.
It is essential for the growth of your business and for increasing profitability to carry out measures such as AOV. In fact, you can turn to professionals to help you with the process.
So what if the percentage returned by the AOV is very low?
Strategies to increase AOV
Usually, the first ideas that come to mind are to increase the prices of the products or services offered, or to encourage users to buy more. Warning: don’t make any of these mistakes if you don’t want to lose customers. Who is the solution?
To successfully increase the AOV, you need to provide the user with a great shopping experience. What does it mean? Help your customers find the right products and give them value for money.
The secret is knowing how to implement the optimal actions to ensure that OVA increases. Here are 6 ways to do it:
Users love free shipping and this is shown by various studies: almost 8 in 10 say this is the reason they would shop more often online. Any more information? It’s proven that you spend up to 40% more on online purchases when shipping is free (i95Dev).
However, offering it on all products is not a business: it would not pay off. The secret is to set a free shipping threshold so that it pays off at the right time and on the right items.
How to implement free delivery to increase OVA?
This can be done in three ways:
- At home. It is recommended that you display the free shipping threshold early on and in a highly visible spot on the web (at the top of the page is a good option).
- In the basket and at the checkout. Once your visitor has started shopping and adding items to the cart, the free shipping threshold can be used as a lure to entice them and increase AOV. Then at the checkout you can remind him how much he has left to reach profit.
- Abandonned. If, despite your best efforts, you don’t get purchase results, you have one more chance of convincing your customer with an overlay that appears before their attempt to leave the web.
You are probably wondering how to calculate the threshold. In this regard, it is suggested to set the threshold 30% higher than the AOV (using the value of your modal order, again) so that free delivery is accessible to the greatest number of customers and consequently increases the figure. global business.
Up-selling and Cross-selling
“Upselling” is the process of persuading customers to buy a more expensive, improved, or premium version of a product, with the goal of getting a higher sale based on the original.
We all know the McDonald’s trick of increasing the size of sodas and potatoes in your order. And, at the end of the day, that’s the essence of upselling.
This technique is based on the fact of selling more to a customer who has already made a purchase rather than to a new one: it aims to increase the average order value encourage a major operation.
Upselling tries to make more expensive versions of the same product relevant to take advantage of the inherent temptation in your users. For example, someone buying a computer might invest directly in a 16 GB hard drive instead of choosing an 8 GB one.
Cross-selling Cross-selling consists of selling products that complement items already in the customer’s basket; It’s about making a recommendation that has to do with the original product.
The idea is to help the consumer find the items they want without having to navigate the site. In a way, this action also helps give you a positive experience. For example, someone who buys a cell phone may also be interested in a protective cover and glass.
Any customer who is willing to buy is also open to spending more money. Grab it!
A good strategy for getting customers to buy more is to create bundles of products at a lower cost than they would if they had bought them individually. By grouping items together to create an “all-in-one” solution, you increase the perceived value of a customer’s purchase.
This makes it easier for consumers to get everything they need at the same time and at a lower price, and results in improved CX. For example, with the sale of a tent, you can make a package with basic camping items (sleeping bag, flashlight, batteries, thermal carafe).
Another possibility is to give the same customers the possibility to compose their own package. For example, the store CONTRACT allows users to design their own face mask by choosing the accessories that each one wants. So, clearly, the total order amount increases.
Being able to divide the payment for a purchase into monthly installments or to pay it at a later date at the time of purchase is a strategy which undoubtedly increases the possibilities of sale also in a virtual store.
For example, the implementation of credit card payment in fixed installments or with a minimum monthly interest are payment possibilities that users appreciate in these times.
What is the objective of this type of program? Improve brand awareness, build customer relationships, and increase AOV.
This strategy can include, for example, a small discount on a gift every now and then. In the long run, it will pay off with repeat purchases from satisfied and therefore loyal customers.
Loyalty programs are an important measure for customer retention; especially for stores that offer consumable products that users have to repurchase, such as beauty, hygiene or food products.
According to the study carried out by eMarketer, 58.7% of consumers say that obtaining loyalty points is an aspect they value in the shopping experience. Additionally, there is a chance that over 70% of shoppers would recommend a brand if it has a quality loyalty program..
Show product reviews
How Can Customer Feedback Help You Increase Your average order value of your virtual store? One of the ways to build user confidence is “social proof”; that is, through the opinions of other customers on the brand.
According to Microsoft, 77% of users turn to brands that ask for customer feedback. Because? Positive reviews increase confidence in the product or service, in the store and in the brand; therefore, building credibility also increases the average order value.
Another aspect that helps with conversion is the successful purchase notice. If the potential customer sees that other people are successfully buying a product they want from your store, it is very likely that they will be motivated to become consumers themselves.
Knowing the AOV is the basis for getting your customers to spend more and more money in your virtual store. Applying the strategies that we have seen throughout this article will surely increase your sales.
But do you want some advice? Do not perform all the actions at the same time. Testing the effectiveness of each strategy, one by one, will then allow you to determine which one is best suited for your business to increase the average order value.
The best thing about working with AOV is that you have to focus on users who are already buying from your store or visitors who are already planning to buy – we are not talking about potential customers. Therefore, the only thing left to do is give them that necessary little push to the cart and, then, until the purchase is made.
Also learn how to help your customers discover and purchase other items that are relevant to them or choose a higher value option, depending on their needs. At the end of the day, it’s a value exchange: win-win.
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