How to Increase AOV in Ecommerce

Is the revenue from your ecommerce business lagging lately? Are you looking for ways to improve those metrics? Well, today’s your lucky day!

We’ve talked about the three levers for manipulating revenue traffic in our post, The Undisputed Secret to a Successful Ecommerce Business, and today we’re going to focus on the AOV lever.

Average order value (AOV) is the average dollar amount a customer spends when placing an order on your ecommerce site. You can calculate your store’s average order value by dividing your store’s total revenue by the number of orders taken.

While AOV might be an obvious lever to pull, it’s actually the hardest and most complex to influence. It’s not as simple as raising your prices (in fact, this can often be the wrong move).

One of the best ways to bring in more income is to increase your average order value.

So, if you’re looking for cost-effective ways to earn more revenue for your online store, then read on to learn more!

 

How Can You Increase AOV?

So, what’s all the hubbub surrounding this metric?

To put it simply, the higher your AOV, the more revenue you can bring in from the same number of customers. This means you can boost income without increasing marketing or sales costs by the same proportion.

If you’re a Shopify customer, you’re in luck! Shopify makes it easy to see your numbers in your customer reports.

Let’s take a look at some valuable strategies you can use to increase your average order value.

 

Test Prices

You have to be very careful with testing prices, but it’s a good idea to find out the price sensitivity of your products to find the right price that’ll drive the most revenue.

We strongly advise against A/B testing your prices for these reasons:

• Perceived Unfairness: Customers might feel it’s unfair if they discover someone else purchased the same product for a lower price.
• Brand Reputation Risk: Inconsistent pricing could harm your brand’s reputation if customers feel deceived or confused.
• Customer Relations: You might end up with a group of customers who are paying more than others, which can lead to dissatisfaction.

Instead, test promotional offers or programs. This way, all customers are still offered the same prices and benefits. Some customers will receive your promotional messaging, and others won’t. This allows you to have visibility into how changing prices will affect sales without the risk of angry customers.

Offer Free Shipping

One of the most foolproof ways to increase your AOV is with a free shipping tier. Set a free shipping tier that’s just above your current AOV. We recommend starting with 1.25–1.5 times your current AOV.

People hate paying for shipping. It’s one of the few remaining reasons some still prefer to purchase in physical retail stores. So, customers are irrationally motivated to purchase more in order to get free shipping (even if, in the end, they spend more).

Try creating a free shipping tier and messaging it across your entire site in an alert bar as well as in the cart, letting customers know how far away they are from earning free shipping. We can almost guarantee you’ll see an increase in your AOV overnight.

Offer Intelligent Upsells

Upsells that make sense (hence the intelligent qualification) can be a great way to increase AOV. You can work upsell offers into your product pages and upon add-to-cart clicks (in the “you may also like” style) or as part of the checkout experience.

Be careful if you include upsells in the checkout as you don’t want to distract too much from the actual checkout process. Monitor your cart abandonment rate closely as you test checkout upsells.

Create Tiered Discounts or Promotions

Offer discounts to customers only if they spend a certain amount (in increasing increments).

We’ve all received these offers from retail stores: Spend $100 and get $20 back, spend $150 and get $30 back, and so on and so forth.

While it might feel like we are getting goods for free, this is actually just a store working to increase their AOV.

Bundle Products

Bundling is the practice of offering several products or services as a package deal, often at a discounted price. This practice will provide customers with more value and convenience.

If you group products that often sell together, this’ll encourage customers that were looking to buy part of a set to buy the complete set — and a more expensive set. This’ll increase your AOV.

Plus, for ecommerce businesses, bundling multiple products into one order helps you save on shipping costs and materials.

Offer Multiple Product Discounts

This is similar to bundling products, except you apply this practice site-wide to any combination of products and offer a discount for purchasing several different items.

For example, buy three and get the fourth item free (or 50% off).

Add Post-Purchase Upsells

There are now technologies that allow you to offer upsells after the initial purchase (but before they leave your site).

This is a great tool because there’s no risk of losing the sale by offering an upsell (as the sale has already been completed), but it still allows the customer to add an additional item to their purchase with a single click.

Remember, the key is to offer relevant and valuable products that genuinely enhance the customer’s experience with their initial purchase.

Send Post-Purchase Coupons

OK, this doesn’t actually increase AOV. But it does incentivize subsequent purchases shortly after the initial purchase by customers.

Everyone loves free stuff. Similar to the free shipping strategy we listed earlier, you can encourage more people to click “buy” by offering a free gift or a coupon code with the purchase.

A gift card or a coupon code offer motivates customers to purchase from you again in order to redeem it — especially if you attach an expiration date to your offer. Use these in your receipt emails or follow-up emails soon after a purchase is complete.

Try a Subscription Model

Subscriptions are very popular in today’s market, and for good reason. They’re a great way to increase the AOV and establish recurring revenue.

You might think that your product doesn’t lend itself easily to a subscription model, but think again. If you get creative, more products than you might think lend themselves to this subscription model.

If you need a platform to provide the necessary tools to execute a subscription model, check out this blog.

Launch Complementary Products

Consider expanding your product line to include complementary products, with an emphasis on those that match your current best sellers.

If you have products on your site that complement your best sellers, people are more likely to purchase them together.

Encourage Gifting

Do you remember AOL’s campaign to get friends to sign up? They distributed free trial disks (first floppy, then later CDs), allowing potential customers to experience AOL’s service for anywhere from 500 to 1000 hours.

This “carpet bombing” strategy of giving away free access to AOL’s service was a key factor in the company’s rapid growth during the 1990s.

Try a “buy one send one” campaign or a campaign to gift a product to your friend when you purchase yours around the holiday season.

Test a Variety of Promotions

Promotions are the lifeblood of ecommerce today, so make sure that you have a healthy promotional calendar to keep your ecommerce store moving. And contrary to popular belief, you can offer promotions without degrading your brand (so long as it’s done strategically).

Take some time to test various types of promotions that suit your company and your brand. We outline a checklist to keep your promotions on track.

Final Thoughts

AOV is one of the many levers you can pull to help grow your bottom line — and it requires the least amount of new marketing and advertising spend. Put the professional advice above into action, and you’ll see an increase in your average order value in no time.

If you need help implementing these strategies, reach out! Our award-winning team is always eager to help.

Looking for more tips on how to increase AOV? Check out this post by Smile.io.