If you’re an e-commerce business that regularly drives customers to your online store, optimizing average order value (AOV) can be a powerful way to increase revenue. AOV is the amount of money a customer spends during one purchase. By understanding and utilizing key strategies for increasing AOV, you could potentially double or triple your monthly profits without having to drive more traffic. Keep reading to learn what exactly AOV is and how you can use it to maximize sales!
What Is Average Order Value and Why Does It Matter?
When it comes to running a successful business, understanding your customer’s spending habits is key. As mentioned average order value is a metric that measures how much the average customer orders from you in a single transaction. This figure provides valuable insight into what consumers are willing to spend on your products and services, as well as how much profit you can expect from each purchase.
To calculate this valuable figure, all you need to do is divide your total sales revenue from a given time period by the number of orders made during that same period.
With AOV, marketers can observe trends in customer behavior and make strategic decisions when creating new offers or optimizing existing ones. By analyzing your AOV data, you can identify which customers are more likely to buy higher ticket items and target them with relevant offers. AOV is an essential metric for businesses looking to determine their overall financial performance and ensure they’re providing customers with the best possible buying experience.
Tips for Improving Average Order Value (AOV)
Increasing average order value is a great way to grow profitability for businesses. Luckily, it’s easier than ever for businesses to implement strategies that bring shoppers back often and encourage higher spending per order.
Bundles are when you offer a set of related products together at a discounted price, compared to buying them separately. This encourages customers to buy two or more products in one transaction, thereby increasing their total spending per purchase.
Offer Volume Discounts
Offering discounts on bundled items boosts customer loyalty and makes them feel like they are getting a good deal, which drives repeat purchases and further increases your AOV over time. The incentive of paying less per item when a customer buys more can encourage shoppers to purchase larger quantities.
Create Limited-Time Offers
When designing a limited-time discount or bundle, be sure that it is both attractive enough for customers to take notice and profitable for your company at the same time. Also keep track of data from campaigns in order to measure the effectiveness of such tactics as this may be beneficial when deciding on when and how often such campaigns should run.
Offer Free Shipping
Free shipping makes customers more likely to try a new product or buy a higher quantity of products, as they don’t have to worry about extra costs added to their orders. Additionally, many customers now expect free shipping, so offering it may make the difference between them buying from your store or another competitor’s.
Give Personalized Product Recommendations
One of the most effective strategies for increasing average order value is to give specific product recommendations tailored to each customer. In this way, customers are likely to find appealing offers that they may not have found without the personalized guidance.
Cross-Sell and Up-Sell
Adopting cross-sell and up-sell techniques whenever appropriate also helps with boosting AOV as customers tend to purchase more items at once if you suggest complementary products or upgrades.
Offer a Free Gift
Offering a free gift encourages customers to make larger purchases, as they feel like they are receiving added value for their money. Not only is it an enticing offer, but it’s also an effective strategy for boosting sales.
Start Growing Your E-Commerce Business with APS Fulfillment, Inc.
At APS Fulfillment, Inc., we offer full-service e-commerce fulfillment out of Miami. We make inventory management and goods tracking easy and simple. We’ll also support your business and automate the warehousing, prepping, shipping, picking, and packing of your orders!