How to Boost Average Order Value

High conversion rates are the Holy Grail when it comes to measuring the success of digital marketing. The more visitors you convert into customers, the more profitable your business. 


Contrary to this tightly-held belief, a rising conversion rate may be misleading. What if you are gaining more customers, but they are buying fewer or less expensive items? Or what if they are making fewer orders overall?

Customer Lifetime Values and Average Order Value (AOV) are metrics that give a truer picture of the profitability of your digital interactions. These are discussed with more detail in our previous blogs, 3 Steps for Increasing Customer Lifetime Value and Average Order Value Matters… Sometimes.

If you earned $2,400 in revenue from 100 orders, your AOV is $24. If 100 orders yielded $5,400 the previous time you checked, you need to figure out what’s impacting your AOV—and fast. Your customers could be spending the same amount on more frequent, smaller orders. However, if this isn’t happening, tactics for boosting AOV are easy to implement.

Easy Tips for Increasing AOV

1)  Offer Free Shipping

Customers love free stuff, especially free shipping. UPS discovered that free shipping inspired 69% of customers to add items to a shopping cart. Your business can offer free shipping for orders over a certain amount to encourage more purchases. Weebly recommends setting the threshold above your AOV by 15% to 20% so you can meet your goals for raising order values. 

As the shopper adds items, they can receive reminders about how close they are getting the threshold for free shipping. Different purchase amount thresholds can be created for special shipping levels.

Free shipping offers not only raise the AOV, but they also keep you from losing customers. UPS found that 61% of online shoppers abandon shopping carts because of shipping costs.

2)  Give Deals for Abandoned Carts

The Baymard Institute found the average online shopping cart abandonment rate is 68.81%. Your business can recover some of these lost customers by offering incentives for completing a purchase within a certain time window. BI Intelligence estimates that 63% of the $4 trillion lost to cart abandonment is recoverable.

Many of these consumers plan to order products later, but abandon their carts because of shipping rates or a complex check out process. Emails with offers for free and discounted items or free shipping may entice customers to go through with their purchase. Listrak reports that emails sent within 3 hours of cart abandonment have a 40% open rate.

3)  Start a Loyalty Program

Loyalty programs are great ways to keep customers engaged. The Center for Retail Management, Northwestern University estimates loyal customers make up 55 to 70% of total sales. To encourage loyal customers to spend more, your business can develop a rewards points program. For instance, a customer making a purchase of $50 may earn 10 points, and 100 points may earn them a percentage off on their next order or a free item.

Loyalty programs don’t just encourage more orders from loyal customers. They encourage higher-value orders. ClickFox discovered 46% of shoppers have increased their business with companies that offer loyalty rewards. According to HubSpot, return customers spend 67% more than new customers.

4)  Encourage Cross-sell and Up-sell

Every order presents an opportunity to encourage a customer to buy items that are related to their intended purchase or a better version of the original item. Shoppers may not be aware that they can enjoy their bottle of wine more if they purchase a decanter that aerates the wine and helps develop the flavor.

Accessories to larger items present an ideal opportunity for cross-selling. If a customer is buying a dress, you can include messages like, “Customers who purchased this wrap dress also purchased these black, patent pumps.” Items can also be bundled together for a discount. For instance, shoppers can be offered 2 scarves for $30 when they would normally retail for $20 a piece.

5)  Provide First-time Shopper Incentives

First-time shoppers can be offered special discounts or bundle bargains in return for their contact information. This information can then be used to reach out with push notifications for limited-time deals. Special offers may lead a potential customer to make an impulse purchase. A good first experience with your company may inspire this new customer to refer your products and services to more people.

Developing a Multi-channel Marketing Strategy with AOV

Once you have ramped up your tactics for increasing order value, the AOV metric can help your business understand which digital marketing tactics and channels are the most profitable for your business. Analytics can refine your examination of AOV so that you can calculate the value of orders made on different devices. For instance, Statistica reports that the AOV for online purchases on a desktop are $75.90 while AOV for mobile is $88.89.

At Pluris, our marketing experts can work with you to develop a multi-channel marketing strategy that ensures you get the most value out of every digital interaction.

Is your business making the connection between AOV and your ideal marketing strategy? Work with Pluris to connect the dots. 

Category: customer acquisition, customer experience

Michael Caccavale

Michael Caccavale

As the leader of Pluris, CEO Michael Caccavale is the innovator and forward-thinker behind the company’s marketing enablement, analytic and optimization solutions.

About this blog

At Pluris, we believe that we all can do a better, more efficient job at marketing to our most important customers. On this blog, we'll discuss how strategy, database management, offer optimization and analytics can help us all be better marketers. Sometimes, we may just talk about sports.

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