There are many key performance indicators you can track to see if your e-commerce business is heading for success.
But, in addition to profits, conversions, customer lifetime value, cart abandonment rates, and number of orders on a daily/monthly basis, it’s also essential that you continue to monitor average order value.
But what is AOV in the first place? And what can it tell you about the effectiveness of your sales and marketing strategies?
Simply put, AOV represents the average dollar amount that customers spend on your website each time they make a purchase from your store. To calculate the AOV, simply apply this formula:
AOV = Total revenue / Total number of orders
There are two reasons why AOV is important for the growth of your online store:
The metric provides valuable information about your customers’ buying habits.
Focusing on AOV is a great way to drive your business success because it relies on improving your sales and marketing tactics and increasing your profits.
This article will provide you with the best strategies to increase AOV in your store. Let’s get into them.
Cross-sell complementary products
One of the best ways to increase AOV on your e-commerce site is to encourage your customers to buy multiple products.
In doing so, it’s essential that you don’t just shove irrelevant stuff in their faces and alienate your website visitors by being pushy. Instead, if you decide to use cross-selling on your site, make sure the action of adding additional items to the cart is beneficial to the customer experience.
Also, be sure to use top quality UX design so that the action of adding more items to cart is an intuitive extension of the overall shopping experience instead of becoming a nuisance.
Overall, there are two great methods for implementing cross-selling techniques on your e-commerce website.
For one, you can do something similar to Nomad, a brand whose product pages include super-relevant product recommendations right below the main “Add to cart” button.
For example, on the product page below, the main product displayed is a smartwatch strap, and the cross-selling recommendation is a wireless charger for the same type of smartwatch, an accessory that can complete the experience of owning ( and recharge) this type of portable device.
On the other hand, you can go in a different direction, as West Elm did.
On this e-commerce site, cross-sell recommendations are only shown once a customer has added an item to their cart. Next, the site’s algorithm displays a recommended product that can be purchased without leaving the cart, along with several additional options that potential buyers can review and add to their order.
Post content that motivates cross-purchasing
Cross-selling on product pages is a great strategy. However, this is not always the best way to increase AOV in your online store.
This is where a well-planned content marketing strategy comes in.
Well-developed content is a great tactic for bringing value to your audience while helping you increase your profits.
By posting the right content, you can effectively showcase the products in your offering, create logical and meaningful relationships between complementary items, and educate potential buyers on ways to solve their unique problems.
For example, if you know your target audience has a particular problem that requires multiple products to be addressed, you can use blog content to create links between those products. And the best part is that this strategy doesn’t just help you increase AOV. It also benefits your audience by offering proven solutions and guaranteeing them an outstanding overall shopping experience.
You can see it in action on this Transparent Labs blog post.
In the article, the brand provides a list of supplement suggestions for those with a mesomorphic body type, with different product recommendations depending on whether the reader primarily wants to build muscle or lose body fat. As you can see, each group gets at least two or three supplement recommendations, and they’re not just encouraging readers to buy. More importantly for the CX, the article provides practical guidance on how best to combine these products to help readers achieve their fitness goals.
Use Price Anchor
Price anchoring is another great strategy to increase AOV. This method is based on the established psychology of the buyer, more precisely on the notion of perceived savings and value.
Basically, people use price to assign value to products. This is, for example, why most buyers are happier investing in a Rolex than a Tudor, even though both brands produce Swiss-made luxury watches.
But, the fact is that the average monetary value of a Rolex is tied to a price tag of $7,000 to $12,000. On the other hand, the average cost of a Tudor falls just above $4,000. It’s almost half the price – even if the value the buyer gets is about the same.
So how can you use price anchoring to increase AOV on your website?
The best way to do this is to assign a reference price to your products. Then, allow your website visitors to purchase that same product for less than its “original” value.
You can see this strategy in action on the GetSafe pricing page. For their two most expensive price tiers, the company created an anchor price in the form of a perceived discount. Just above the listed price, the site designer has placed the original price in a striking, complementary color.
The brand has also created the feeling that this price is temporary, embedding the anchor price in the mind of the buyer with a very real sense of urgency.
Make Bulk Buying Easier
Another superb strategy for increasing AOV on your site is to encourage visitors to buy in bulk.
Bulk buying has grown in popularity over the past two decades. According to some sources, this type of shopping behavior has increased by 26% in the last quarter of 2021, which shows that consumers are appreciating the benefits:
always have basic items on hand
being able to save money by buying more at once
knowing that they are doing something good for the environment by minimizing the amount of packaging and shipping costs associated with their purchases
But how can you encourage your website visitors to buy more (and increase the amount of money they spend with your brand)?
Well, one thing you could do is offer a bundle pricing option on your product pages, like in this example from Ozark Armament.
As you can see, by clicking on the “Buy in bulk and save” CTA, potential buyers are informed of the discount rates they can get for each individual item when they purchase a given amount. And the handy quantity selector makes it easy to track such a purchase, making the transition from single item purchases to bulk orders absolutely seamless.
Simplify add-ons and product customization
Using personalization in your e-commerce business is a great strategy if you want to drive growth (or boost AOV, for that matter). Just consider that 73% of online shoppers expect retailers to provide shopping experiences tailored to their unique pain points.
But that’s not the only reason to prioritize delivering relevant CX.
Marketers also agree that success in 2022 will largely depend on brands’ ability to personalize the buying process, create seamless experiences, and find ways to make their offers relevant to their target audience.
Firepit Surplus shows us another good example of a user interface that draws the buyer into the customization experience. Drop-down and select items are easy to understand despite the many options. The way the fields are laid out also makes the interaction feel like the user is completing a process.
Alternatively, you can do something similar to Manfrotto and allow people to spend more on your store through add-ons. As you can see from the screenshot, buyers who add an item to their cart on the Manfrotto site are offered a special offer, giving them the chance to purchase an item worth $30 for a third of its original price.
Discounts on Gamify orders
Another great way to motivate website visitors to spend more on your store is to use gamification.
Why? Because injecting a dose of excitement into your online store doesn’t just make the shopping experience more enjoyable for your audience. On top of that, it’s a great way to help people see the benefits of buying with your brand.
Fire Department Coffee is an online store that has implemented a spin-to-win mechanism on its site. As soon as the page is fully loaded, the visitor sees a stylized roulette wheel, offering a number of different types of discounts. These games are notoriously hard to resist and have been known to increase a site’s conversion rates.
A discounted order means the buyer feels they can spend more. Since they will save money on the entire order, they can also maximize the savings and add more items to their purchase.
Increasing the average order values in your online store is not too difficult to achieve. Yet it offers excellent benefits – both short and long term.
I hope this guide has given you several ideas on how to use AOV boosting tactics on your site. All you have to do now is pick the ones you like the most, implement them on your store, and keep measuring that metric to see how well your efforts paid off.