One of the most important aspects of keeping a tab on the average order value and its subsequent changes is to understand profits from each conversion. Unlike popular belief, customers don’t often shop for a single product, and can be led to other related products; only if you know the right approach, once you have a deeper insight about your customers’ overall spending on each purchase.
Retailers often work to amp up their marketing campaigns for enhanced customer conversion, while undermining the ‘buy more’ factor when customers are making a purchase. This is exactly where average order value comes as a standard of measure for business owners that can go a long way in yielding more revenue. But before all of that, you need to understand the fundamentals of average order value that can help you enhance your ROIs, and put things into perspective.
What Exactly is Average Order Value and Why Optimizing it Matters?
First things first, the Average Order Value is the average dollar amount that a customer can spend on a single order each time they visit your eStore. In other words, it is a prerequisite for a well-rounded cashflow into your website every day. Therefore, instead of taking it as a gargantuan task, you can start with simple hacks like installing a plugin to keep count. Here are a few benefits it can bring:
- First, the system stays updated with a live cash flow figure.
- Second, in case of a traffic surge insights derived from AOV (Average Order Value) makes you better prepared for it.
Average Order Value can be calculated as: Total Revenue Generated Number of Orders
Now that you know all about average order values and how it can boost your overall online revenue, here are some of the ways in which you can optimize it:
1. Provide ample delivery options and a free shipping threshold
A simple, yet effective way to boost your average order value can come from offering a free shipping offer for customers who purchase more than a predefined amount. An example can be ‘Free Shipping on all orders over $120′
If the customer’s net shopping cart value is less than the threshold amount, you can prompt your customers to add more products into their cart to make it eligible for free shipping. It could work out best for them to browse, wishlist, and add more relevant products into their purchase, thus increasing the overall average order value, and time spent on your website.
2. Reasonable Product Discounts at Different Purchase Values
Have you ever observed shopping trends during the holiday season? From Thrift stores to top-brand outlets, good discounts at different spending levels is an absolute crowd pleaser. The same can go for your online store, with added benefits like free shipping to urge your customers to shop more to get most of such discounts. Sometimes volume discounts (Buy 1, Get 2 @ 30% OFF) can also work for customers looking for bulk-shopping since it can provide them with maximum value.
As a business owner, such features may seem like a counterintuitive exercise at some point, but know that from your customer’s shoes features like these encourage them to buy more now instead of shopping around later.
3. Limited and First Time Offers
Due to the modern understanding of FOMO (Fear Of Missing Out), customers are always on the hunt for exclusive deals that can be availed for a brief period of time, or exclusive to first-timers only. To take advantage of this, you can introduce limited time offers with a countdown timer, giving the customer a sense of urgency.
Offers for first-time customers can be a great way for your outreach strategy as more and more people would come flocking to your website to learn more about it and finally pertain to an increase in positive conversions. Please remember that these first-time buyers are the organic traffic that can help your stain to gain popularity online – since they’d share about it with their friends if they loved your products and the shopping experience. Ultimately, they can turn into a strong loyalty base over time.
4. Giveaway Gift Cards
Calling to psychological marketing instincts, giving away gift cards to recent and loyal customers is a great way to make a positive impact on their shopping decisions. Remember, the more gift cards, the better as it increases the frequency of visitors coming to your website. It doesn’t always necessarily mean a gift card of a massive amount, even a $5 gift card can get people seeing how to use it.
5. Cross-Selling and Up-Selling
Cross-selling refers to showcasing recommended products to your customers while they’re browsing other products. Generally, these products are a complete package that goes with the product type the customer is currently viewing. For example: If a customer is looking for good party dresses, you can showcase similar party dresses, party shoes, accessories as a part of your cross-selling strategy. For making a stronger impact, you can also attach buying guides and reviews for your customers to think about it as a whole.
Upselling, on the other hand, refers to the strategically positioned products on the recommended product page or checkout that are similar but of higher prices for your customers to weigh-out options, possibly increasing their minimum spend. It can include limited-edition luxury products as well.
6. Engage Them in Interactive Contests
Because of the continuous buzz that goes around for brands online, you need to break the fourth wall and interact with your customers on a more personal note. What better way than letting them participate in online contests. It can be anything from humorous to creative, something that showcases your products in the best way and tests your customer’s loyalty and shopping experience with you. The winners can obtain rewards that can be in the form of redeemable points, or exclusive merchandise.
7. Chatbox and AI support
There can be more than a few instances when your customers can do with some quick answers about their queries related to products, shipping, payment methods, etc. In this case, having a self-aware, smart, and fast AI chatbot can go a long way in taking care of your customer’s needs and make them feel cared for while shopping. It can lead to trust-building and increase the chances of positive conversions.
To get the most of your average order value data, you need to closely observe all parameters that can influence the overall performance of your online store. Any major fluctuations in the numbers can give away a lot of helpful insights into what’s working out for your customers, subjectively.
If you’re looking for advanced, custom, end-to-end solutions, instead of moving around from one freelancer to another, I’d recommend you to hire Shopify theme developers at CodeClouds who can bring value to your online store, in all terms. They’re experts in delivering target-oriented development products, distinctly personalized according to your preferences. You may also find the blog How to Set up a Subscription Service a good read to know all about setting up a subscription service for your WooCommerce and Shopify store.