How To Increase Your Average Order Value

When it comes to running a business, there are many aspects you need to keep up with. Even seemingly small things can make a big impact, so keeping an eye on each component can help you run a more successful business. If you are making a lot of sales, it is easy to get excited about the number of customers you are selling to. However, if your average order value is low, there are ways to increase your revenue and encourage customers to make larger purchases.

What Is Average Order Value?

Average order value measures how much is spent on each transaction through your website or online store. It shows you how much each customer spends per order, on average. You can find the average order value by taking the total revenue and it dividing it by the total number of orders. Average order value is a Key Performance Indicator (KPI) and can help you determine how much (or how little) the average customer is spending. If your average order value is low, there are steps you can take to encourage customers to make bigger purchases.

How To Increase Average Order Value:

One of the most common tactics to increase average order value is to offer free shipping after customers spend a certain amount. Even if your shipping is not expensive, it encourages them to fill up their cart to get the deal. Although you will have to cover the shipping costs, it is well worth it to increase your sales. Look at your competitors to see if they offer free shipping after a certain price point, and base your deal based off of that. Many businesses start free shipping at $50 but depending on the price of your products you might want to go higher or lower.

Product bundling is another popular way to increase order bundling. If there are two or more products you sell that go well together, consider creating a bundle. Bundles will give customers a slight discount when purchasing the products together. This not only offers your customers a deal they will love but encourages them to try new products!

Cross-sell complimentary products. If your customers are looking to purchase a certain product, recommend other products that will pair well with the one they’ve already selected. Make sure the complementary product is at a lower price point, so customers will be more inclined to consider the purchase.

Customer loyalty programs are another great way to increase average order value. If you choose to use a customer loyalty program, there are many ways you can choose to reward loyal customers. Offering a welcome gift for signing up is a good place to start. Members-only sales or early access codes to big sales are other incentives to encourage customers to shop with you. Consider letting customers build loyalty points for discounts as well!

While average order value isn’t the most important thing you can focus on, it is important. Your main goal should be to provide your customers with excellent products and service while helping them discover products and deals that they can’t refuse.