Increase Your Average Order Value for More Profitable Checkouts

Posted by Eman Abulmagd on

It takes advertising, reputation and a lot of work to get the right customers to your online store. And it takes great copy, attractive digital merchandising and an effective sales strategy to get them to take out their credit card and decide to place an order. You worked hard and now you have a customer who loves your product and is willing to pay. How can you get them to buy more products from your store during their visit?

On the contrary of what some store owners think, it's not about forcefully pushing products and offers to your customers during their visit. It's rather about helping them get more value out of your store while increasing your profit margin at the same time. It's a win-win situation. Here are a few ways that you can use in your online store to increase the average order value (AOV)

Free Shipping above a certain Threshold

So you went to an online store selling chocolates and ordered about $50 worth of sweet treats. Just before your checkout, you find out that they have free shipping for all orders over $75. What usually happens here is that you start going through the website to see if they sell anything else that you already need, in order to increase your cart value and enjoy the free shipping. You'll suddenly start looking for dark chocolate chips for the tray of cookies that you'll be baking at this weekend's charity bake sale.

See what happened here? the free shipping threshold makes the customer actively search for additional products they might want from your online store. Even sometimes, it might make them convince friends or family to order with them so that they can both enjoy the free shipping. But make sure that you calculate your average order value so that you don't harm the profit margin in the process.

This tactic is used by thousands of online stores. This is an example from Velour Lashes, where they offer free shipping for orders over $50

A website showing a banner that announces free shipping for orders above $50

Fixed discount for spending more than a specific amount

This tactic is about offering the customers a free voucher when their cart exceeds a certain value. For example, you can offer a $10 voucher when their total order exceeds $75. This will motivate them to exceed the $75 limit to get the free voucher.

Bundles and BOGO

Bundling products together can go a long way in increasing the average cart value, especially when you bundle products that fit together. So for example, if your online store sells fresh organic groceries, you might want to bundle homemade peanut butter with organic strawberry jam. The bundling doesn't only increase the order value, it can also help a lot in selling products that don't usually sell that well on its own. Or you can use it for new products that you want your customers to try, by bundling them with products of high demand.

Also, you can use the BOGO (Buy One Get One) offer to increase cart value. Or offers like buy 3 pieces and get the 4th for free.

Offer Gift Cards for next purchase

So, you know you have a customer who is interested in your products and willing to pay. Why not bring them back again next time? After completing their order you can give them a discount or a gift card to use in their next purchase. This will motivate your customers to come back to your store again to use their discount or gift card. This tactic can be very beneficial, as repeat customers are considered the lifeblood of businesses in any industry.

Cross-sell and Up-sell

Cross-selling is recommending another product for the customer that goes with the product they're buying. So if a customer is buying a pair of trousers, you might suggest or "cross-sell" him a leather belt to go with the trousers. While up-selling is basically upgrading. As an example of up-selling, instead of the customer buying these $30 jeans, you might suggest her buying a pair of $70 embroidered jeans instead.

This graphic illustrates the difference between up-selling and cross-selling in a very clear way.

A graphic design illustrating the difference between cross selling and up selling

Create a loyalty program

Creating a loyalty program, especially point-based programs, gives your customers reasons to choose your products over the competition and buy from you. Not only that, but also a well-crafted loyalty program can also encourage them to recommend your brand to their close social circles. Loyalty programs are one of the biggest tactics that you should consider f0r increasing your average order value.

Bulk Discounts

Bulk discounts are about offering a discount on the item when the customer buys in bulk. Usually, the discount increases when the number of units the customer orders increases. For example, assuming you sell toilet paper. Buying one pack of toilet papers will cost $5. if you bought 6 packs, you'll pay only $4 for each pack. If you order 12 you pay $3 for each pack and so on.

Bulk discounts can be very powerful tool to increase your average order value, especially when you're selling consumable products like food, toiletries, detergents...etc. Bulk discounts will encourage them to stock on the items they love or, even better, make group orders with friends and family to enjoy the discount.

If you're not already applying these tactics in your online store, give it a go, try a few of them and tell us how it went. Share it with us on LinkedIn, Facebook, Twitter or Instagram.

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