As an eCommerce entrepreneur, you’re always on the hunt for ways to make more profit. And one of the most effective ways to do that is to increase your average order value. However, knowing how to get your customers to spend more money can be confusing.
In this post, we’ll cover five practical, powerful, and simple strategies you can use to beef up your bottom line. Sounds good? Let’s jump in!
Table of Contents
What is Average Order Value?
Let’s start by defining what your average order value is.
In a nutshell, average order value (frequently abbreviated to AOV) is a metric that represents the average amount that a customer spends in your store in a single transaction.
To calculate your average order value, you simply divide your store’s revenue by the total number of orders.
For example, let’s say you generated $5,000 in sales from 500 sales last month. Your AOV in this instance is $100 ($5,000 in sales / 500 orders = $100 AOV)
Why Does AOV Matter?
The main reason boosting your AOV matters is because, when done right, it allows you to make more profit from each order.
Think about it: if your acquisition costs and fulfillment costs remain the same, then more sales will translate to a bigger profit margin.
For example, let’s suppose you sell cookware and want to boost your AOV. So, you invest $5,000 to create a digital product (e.g. An e-cookbook to compliment your products). Then you install ReConvert and place your ebook cross-sell at checkout.
Let’s say that this checkout cross-sell boosts your AOV by $5, here’s how this would look in real terms:
As you can see, even with increased expenses ($5,000 for the e-book and $360 for one year of ReConvert) we’re making much more profit from our store.
The beauty is that small increases in your AOV can translate to big increases in profits. Plus, as you’re guessing by now, it isn’t very difficult, either.
So, let’s jump in and discover five proven ways you can start generating more revenue from your store right now.
5 Proven Ways to Increase Your Average Order Volume
There are so many ways you can increase your AOV. But we’ve chosen these five methods because they’re proven to work – plus, super simple to implement.
Deploy one-click upsell offers
One-click upsells are a great upselling technique where you display immediately after checkout before your customer lands on the thank you page.
So let’s say you’re selling guitars – immediately after a customer buys a guitar, you could hit them with an offer to buy a spare pair of strings or a carry case.
The beauty of one-click upsells is that the shopper doesn’t need to re-enter their payment details. So, there’s almost no friction to impede conversions.
Plus, you can highly target your offers, building them so that they’re triggered by things like cart contents, shopping history or any other customer characteristic in Shopify.
Because of this personalization and minimal friction, we’ve seen ReConvert users boost their AOV by up to 15% just by adding one-click upsells to their store alone.
Add product recommendations to your thank you page
Once you’ve implemented one-click upsells, the next best way to boost your AOV is by placing product recommendations on your thank you page.
See most retailers don’t optimize their thank you page. It’s simply a placeholder. But this is a mistake.
Because when you think about it, customers who land on your thank you page are in peak buying mode, right?
Plus, data from ReConvert shows that customers come back to view the thank you page 2.2 times per order, on average.
So, if you’re not suggesting products, you’re essentially letting a lot of high-intent impressions go to waste.
All it takes is a few personalized product suggestions to tempt anywhere from 2-6% of customers into a second purchase. And with ReConvert, you can also add videos to your Shopify thank you page, collect customer birthdays and more.
Seriously, Amazon, the biggest eCommerce retailer in the world, uses thank you page suggestions to boost their AOV – so it’s certainly a strategy worth testing on your store.
Create a free shipping threshold
Another great way to boost your AOV is to create a free shipping threshold.
See, most customers don’t like paying for shipping. So, they’re happy to spend more to unlock free shipping.
Now this raises the question; ‘Where should I set my free shipping threshold’. Well, every eCommerce business is unique – with different fulfillment costs, profit margins, etc.
But a good place to start is to take your median order value (i.e. the middle number from your store’s order data) and add 20% to it.
This calculation will create a shipping threshold that appeals to the largest volume of your customers and helps bump your order value up.
Of course, make sure to crunch the numbers yourself so you don’t end up cannibalizing the existing profits generated by shipping fees. But once you figure out the sweet spot for your shipping threshold, you’ll see your order values (and profits) start to rise as more customers spend extra to reach it.
Build product bundles
Product bundling is one of the most commonly used tactics to increase sales on your Shopify store and boost average order value. And it’s popular because it works.
When you build great product bundles, it doesn’t only help you generate more revenue, it also helps deliver a better experience for your customers.
For example, guitar retailer Epiphone creates bundles called ‘player packs’ that target beginners
In these bundles, the customer gets everything they need to get started – without having to research every item individually.
If you want to supercharge your bundling, create discounted bundles – where the bundle is cheaper than the sum of the individual parts.
When customers have an incentive to pick up the bundle, you’ll convince a percentage of them to spend more and get more for their money.
Cross-sell at checkout
The fifth way to boost your AOV is to cross-sell items at checkout.
Similar to one-click upsells and thank-you age offers, customers who reach checkout are displaying clear purchase intent.
Think about how supermarkets have lots of candy and other low-priced items at checkout – this is the same idea applied to your store.
Typically, non-physical products work particularly well on your checkout page – thanks to their high margin. We’ve seen ReConvert users offer products like ‘shipping insurance’ or an ‘extended warranty’ and get very high conversion rates.
Go Forth & Boost Your Average Order Volume
In the competitive world of eCommerce, boosting your average order value (AOV) is one of the keys to enhanced profitability. As you navigate the quest for increased revenue, the path becomes clearer with five simple yet potent strategies we’ve explored.
By deploying one-click upsell offers, you create a frictionless opportunity to entice customers with relevant add-ons, upping your AOV by up to 15%.
Maximizing the potential of your thank you page through personalized product recommendations further capitalizes on high-intent impressions, propelling additional purchases.
Crafting a free shipping threshold based on your unique business dynamics resonates with customers’ aversion to shipping costs, elevating their willingness to spend more.
Skillfully curated product bundles, like Epiphone’s ‘player packs,’ cater to customers seeking comprehensive solutions while driving both revenue and satisfaction.
Lastly, seizing the checkout moment to cross-sell complements purchase intent, making non-physical product offerings shine. As these proven methods intertwine simplicity with profitability, you’re poised to elevate your bottom line and take your business to new heights.