Boost Your eCommerce Profit: 6 Tactics to Increase Average Order Value (AOV)

Boost Your eCommerce Profit: 6 Tactics to Increase Average Order Value (AOV)

Did you know that the cost to retain an existing customer and upsell them is 6x more affordable than acquiring a new customer? That’s why in 2023 – the year of predicted economic recession, increasing the average order value of a customer is more important than ever before. 

But the tough question is: “How to do so?” Don’t worry! In this article, we’ll walk you through 6 battle-tested tactics to increase your average order value (AOV), thereby boosting your eCommerce profit.

Without further ado, let’s dive right in!

What Is Average Order Value (AOV) & Why Is It Important?

Let’s say you run an eCommerce business. To make good profits, there’re two ways to concentrate:

  1. You can either increase traffic, resulting from ads or SEO. The more people coming in, the more sales you’ll make.
  2. You can try to increase Average Order Value (AOV) – the average amount of money each customer spends per order. 

Sadly, store owners overlook the AOV strategy. They’re willing to spend a fortune on ads to attract visitors, hoping many of them will purchase an item and the total profit will turn out positive.

On a sunny day, that method works fine. But when you consider the cost of acquiring new customers, you might find it’s irrationally high, especially when more and more competitors are entering eCommerce and dropshipping. You’ll need a large margin actually to make a profit.

It’s mid-2023, and well, too many merchants like you are burning cash to the extent that it’s no longer effective.

With AOV strategy, you maximize the amount you earn for every dollar you spend. By encouraging a customer to spend more, you technically have to spend only once on ads to acquire him/her while earning more profit.

How to Increase Average Order Value (AOV)?

There are countless ways you can try to improve your AOV. However, from our experience, most merchants succeed in supercharging their average order value through these six tried-and-true tactics:

  1. Upselling and cross-selling
  2. Product recommendations
  3. Bundle
  4. Free shipping
  5. Quantity discount
  6. Customer loyalty program

Let’s explore the details of each tactic!

1. Upselling & Cross Selling

While also encouraging shoppers to buy more products, upselling and cross-selling techniques involve a more or less personalized approach.

With cross-selling, you’re trying to sell a complementary product that pairs well with the original item. Whereas with upselling, you’re persuading customers to purchase an upgraded or more expensive version.

The techniques can appear under the recommendation section on product pages, as a pop-up once customers add an item to cart, on cart page, or even after purchase.

For example, this is a pop-up upselling a higher version of a coffee maker machine, which will eventually raise your order value. A cross-selling, in this case, can be promoting coffee filters – quite a relevant product that a coffee drinker would want.

Example of upselling to increase AOV
Source: Bold Upsell

Though upselling and cross-selling have always been great tactic to boost AOV, in order for the tactic to work, you have to upsell and cross-sell your customers properly. By “properly”, we mean that the products you upsell your customers need to be the relevant ones that add value to their shopping experience.

Hint: They are the items that your customers often buy together (e.g: most customers buy a mouse also buy it with a mouse pad)

To see which products your customers often buy together: Go to TrueProfit’s Product Analytics > Click Bundle Analytics. Herein, you can view your best-selling bundles, products, items most bought together, etc.

 

2. Recommendations

Old but gold, product recommendation is being used by most brands and never seems to lose its power.

In many cases, shoppers visit your store to check out a certain item. If they’re too focused on that one product, they may not bother looking around your store. With relevant recommendations, customers can explore other items and end up buying more than expected.

For example, this is how Steal A Sofa displays Related Products on their product pages. Besides product images, they also show prices – kind of a good motive to browse around.

Example of related products to raise AOV
Source: Steal A Sofa

 

3. Bundles

Customers might buy more than one product to fulfill their needs – Why not offer them an all-in-one solution? By bundling multiple items, you create a win-win offer where shoppers can save money (compared to the full price of individual items), and you could push AOV to the top.

Bundles can be a combo of complementary products, like a first aid kit; or items from the same product line, like a 3-mug pack in Iron Man theme.

You can either create a separate product page for bundles like Soundtoys does with their Effect Rack. This package combines 21 items that can be bought separately.

Example of bundles to increase AOV
Source: Soundtoys

Alternatively, you can lay a Bundle on certain product pages right under the product description. Amanda Pearl does it perfectly on their website, with a clean and elegant layout. If there’s something to improve, it’s to display the saved price as an incentive for shoppers.

Example of bundles to increase average order value
Source: Amanda Pearl

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4. Free Shipping / Discount Thresholds

Most people are happy with their purchase until the shipping cost shows up and kills the mood. For many people, this means they’re more likely to grab an offer that can help them avoid paying shipping fees.

Take this insight to increase your AOV. Offer Free shipping for shoppers who spend a certain amount of money. If your current AOV is around $35, try setting free delivery at $40. Victoria’s Secret does this to improve their average order value.

Example of free shipping threshold to increase AOV
Source: Victoria’s Secret

Beside free delivery, you can offer a discount or free gift. “Spend $50 and get 15% off”, “Only $12 more to save 10%”. Pop-up or promotion bar are needed to tell visitors about this promo.

Example of discount minimum to increase Average order value

Note that your threshold shouldn’t be extremely higher than the normal spending in your store, or else people will not bother trying to reach such a distant goal.

 

5. Quantity discount (Buy more, save more)

Much like the previous tactic, quantity or volume discounts will encourage people to buy more. But rather than considering order value, it focuses on maximizing the number of items sold.

Customers sometimes want to buy one product in bulk. Get them an incentive! The more they buy, the bigger the discount.

Example of quantity discount to increase Average order value
Source: Quantity Breaks & Discounts

You can use a Shopify App for volume discount, or simply create a discount code for orders with 2 times or more.

 

6. Customer Loyalty Program

Although not exactly leading to the increased average order value, a loyalty program is ideal for a long-term strategy to build and maintain healthy relationships with customers. Along the way, it can boost sales by incentivizing your members with points and rewards.

See how Happy Paket runs a Membership program. Once a member, shoppers can earn points by purchasing or referring and can later exchange those points for discounts. This creates an engaging experience, a goal worth pursuing, and, more importantly, an opportunity for repeated purchases.

Example of loyalty program to increase Average order value
Source: Happy Paket

Wrapping Up!

All in all, if you’re fed up with pouring more and more money into paid ads, it’s now the time to focus more on improving your average order value. And we hope after reading this article, you can know how to increase this vital metric on your own!

Discover what proper profit-tracking looks like at trueprofit.io