Did you know that finding new customers isn’t the only way to grow your business? That’s right.
There’s another way, increasing your average order value. Average Order Value (AOV), or Average Basket Value (ABV), is about getting more out of the customers already buying from you. In other words, AOV tells you the average amount each customer is spending per transaction. It’s much easier than attracting new customers because they are already interested in what you are offering. Plus, you don’t have to spend on advertising, marketing, or anything else that may cost you an arm and a leg.
So, how do you increase your AOV? Well, here are five tips on how to achieve it.
But First, How Do You Workout Aov?
That’s easy. Just use this formula:
Average Order Value = Total Revenue / Number of Orders
Although it’s a super easy formula to use, you can also use Google Analytics to help work out what your AOV is. However, to use the feature, you must have the eCommerce tracking enabled on your Google Analytics account. One great thing about using Google Analytics for your AOV is that it gives you lots of added metrics to help you understand your AOV.
Now, for the good stuff. Here are five tips that will help you get started.
Targeted Product Recommendations
Often your customers will come to your web store to look for the item that made them land your website in the first place. They find, buy it, and that’s that. That means a small cart and a low AOV. The question is, how do you fix it?
There are two ways you can do this:
Use The “Customer Also Viewed” Feature – Showing them items that other customers have bought along with the product sparks interest. They may not realize that they needed it before.
Suggest Complementary Products – Show them items that may complement what they are buying. For instance, if they bought some pants, you can show them a top, shoes, and even jewelry.
Customers appreciate anything that saves them time. Just like suggesting complementary products, you can put together bundles and packages you think your customers may like. Having the choice to choose from bundles and packages doesn’t go unnoticed with customers. Plus, packages and bundles are usually cheaper for the customer, so it’s worth highlighting how much they will save.
Order Minimum For Discount
This is a great way to increase your AOV. For your customers to qualify for free shipping, set a minimum order limit. Let’s say they need to spend $100 in order to qualify. Wherever you can push an incentive, do it.
Create A Customer Loyalty Program
If you sell items that are replenishable, setting up a customer loyalty program is a sure-fire way to increase your AOV. For example, if you sell cosmetics, a customer will eventually need to stock up. Reward them for spending with you. This encourages them to come back for more and will create a long-term relationship between you and your customer.
Offer Buy Now Pay Later Solutions
Not only is this one of the most popular methods of consumer financing, but it can help you get more sales when choosing a reputable POS financing partner like ChargeAfter.com. In fact, Buy Now Pay Later is that popular; customers actively look for it as an option when they want to make a purchasing decision. Better yet, it’s a neat way to increase your AOV. Buy Now Pay Later gives your customer the affordability factor. And when they pay in installments, they tend to spend more.
This is similar to offering an order minimum for a discount. Explain how they need to spend ‘X’ amount so that they are eligible for cart financing. Break down the affordability for them, so they are more inclined to buy.
The Bottom Line
Do you want to know what’s so great about AOV? It allows you to focus on those who already want to buy. After all, they’ve already come to you with the intent to buy. Perhaps they’ve even already added some items to their cart.
The purchasing mentality is already there; you just have to help them discover other products they may be interested in. Sure, attracting new customers is good for growth. But, focusing on the already actively engaging ones gives you much fewer barriers to overcome.
Think about it. Those who spend more will get more. You just have to show them the way!