One of the key factors to a successful online business stems from the owner or management team’s restless curiosity and creative approach to improving average order values. Yet it doesn’t always come up top of an ecommerce business agenda.
Many forms of revenue creation for your online business, like traffic acquisition for example can be complex and expensive. However, increasing AOV (Average Order Value) by encouraging your customer to buy multiple items and spend more money each order, can be relatively easy and an inexpensive way to drive up your transactions and revenue.
Before we delve into the top 5 strategies, some explanation around what exactly Average Order Value is and how it can give you some direct insights into your customers buying habits and your online business’s trading cycles.
Average Order Value is a simple calculation; Revenue divided by number of orders equals AOV.
Where AOV get’s really interesting is if you start analyzing it by customer to identify your biggest (and lowest) spending customers, you can then target these with a targeted, segmented direct marketing campaign based on these spending insights.
AOV and conversion rate can be used in combination to forecast how much revenue you can expect to earn from website visitors. Useful stuff.
Why it’s a key focus area;
- Can be inexpensive and effective ways to grow revenue versus other tactics.
- Can drive more revenue off less traffic.
Analysis can give some great insights for your email marketing
It’s a key sign of overall website health.
More reliable – less at the mercy of Google’s algorithm changes.
Can typically bring fast and more immediate results.
So, let’s take a look at Magento’s current top 5 strategies to help you grow your website’s AOV.
- Optimising Your Up-Sell And Cross-Sell
You’ve heard about the statement “Would you like to Super-Size your meal?” Chances are you have are familiar with the concept of upselling.
If you’re doing your customer acquisition correctly and bringing relevant, qualified visitors to your website, they are likely to be in buy mode. This is a prime opportunity to offer up-sells and cross-sells, great persuasive tactics that can suggest an upgrade to a more premium or larger product alternative (upsell) or offer related items, so for example if you’re buying a TV, it would recommend useful cables and stands and units to compliment the TV. (cross-sell)
Other cross-sell opportunities we’ve seen used successfully across websites like Amazon and John Lewis include;
- What other customers have bought
- Your viewed items
More from this brand
You might also like
Customer who viewed this went on to buy
Customers who bought items in your basket also bought
Items from your wish list
John Lewis offers a useful selection of these.
On a final note, a couple of references to mention to help focus efforts;
Econsultancy reported back in 2012, Upselling is 20 times more effective than cross selling according to new research from PredictiveIntent.  which shows visitors who are shown similar but more expensive products can drive 4% of sales compared to just 0.2% of sales drive by cross-sell tactics.
Amazon reported as far back in 2006, that 35% of revenues were attributed to their cross-selling and upselling efforts. With the increased ecommerce sophistication, it’s likely this number may be significantly different now in 2015.
Spending time getting your website’s cross-sell and upsells streamlined can pay real dividends. Magento Enterprise offers a powerful attributes feature to help make life easier implementing great cross-selling.
- Product Bundles
Websites offering product bundles can make life easy for your visitors. Bundles bring together the main product and it’s accessories, for instance a guitar, cable and amplifier; or products that are used for a similar purpose, like a tree, a planter and potting mix.
The big online supermarkets are great at offering meal deals, buy this main course, including side dish, pudding and a bottle of wine. The fashion sector offer Shop the Look where customers can buy the entire outfit with one click. This technique is superb at growing your average order value.
Whilst bundles may be discounted to motivate visitors to buy, the simple convenience of buying all the items together can be enough to entice your customers. Some of our customers are regularly experimenting with a wide variety of bundle offers to analyse which offer will yield the greatest sales.
- Customer Rewards
Loyalty schemes are everywhere and some of the most successful include Boots Advantage card, Sainsburys Nectar card, Tesco Club card and American Express BA Miles affiliation.
In order to encourage customers to spend more, loyalty schemes like reward points, promotions and discounts are well used tactics by the big players that incentivize and reward customers for spending.
There are a number of ways to implement this cost effectively, using the Magento Sweet Tooth Loyalty module or the Magento Enterprise editions promotions tools offer a rewards point system.
Offering customer rewards is a great way to gain repeat business and create a loyal following of customers, whilst increasing your website’s AOV.
- Offer easy returns!
One sure fire way to annoy your customers is not making your returns policy clear on site. It’s a big area of concern for your potential customers. If the customer thinks that returning something is going to be expensive and hard work, they may buy fewer items or not buy at all.
Making this crystal clear on your Shipping and Returns page is obviously important.
“Our return policy is simple; any item, any time, any reason. And we’ll pay for shipping on your returns and exchanges to make sure you’re happy. “
Not all businesses can however afford to offer free returns, but at least make it simple and easy to understand.
Many businesses also like to offer a reassurance message sound bite on their home page, like “Hassle Free Returns” Click here to Learn how easy our returns process is.
All of these small measures. to build and foster trust and loyalty and can contribute to growing your AOV.
- Get Personal
Personalisation and tailored recommendations are transforming ecommerce. People are bombarded daily with marketing messages coming at them from emails, social media, blogs, links, reviews, testimonials and more. So the more relevant the product offers, the more likely your customer is to buy.
However there is a caveat. With consumers being more savvy then ever before it has to be genuine. Personalisation at it’s best can mirror the offline experience received in a bricks and mortar store, which is based upon conversations to gain an insights into the customers needs and recommendations served from there.
Getting personal can be as simple as offering an onsite welcome message by name on log in, customizing your brand value proposition and USP bar to show different content to new and returning visitors or serving up recommendations based on search queries, geographic location, buying history or customer segments.
Providing truly customised offers can deliver huge benefits; increasing AOV, sales and profits in the short term to longer-term engagement, creating strong relationships with customers and generates brand loyalty.
Making these factors work requires a combination of automation, web analytics and CRM, when harnessed, they will reveal insights about your customers enabling your business to target your customers effectively.
If you’d like to discover more about increasing average order value, call the Williams Commerce Digital Marketing team on 0116 326 1116 extension 4 and tap into our many years of experience building multi-million pound businesses online.