7 Ways to Improve Average Order Value of Your Ecommerce Store

If you’re an ecommerce entrepreneur, your ultimate goal will be to make more sales and thus more revenue.

In fact, with all the available technologies building an ecommerce store is no longer a tedious task. If you’re on WordPress, all you need to do is to install a plugin like WooCommerce and choose a WordPress theme that fits your business goals.

That said, there are a lot of different ways to generate more revenue from your ecommerce store. Some of them are…

• Optimize your website for better conversion
• Entice customers to return more often (customer retention)
• Persuade your customers to spend more when they do purchase (Increasing average order value)

In this post, let me focus on the third point, increasing the average order value of your ecommerce store.

1. Upsell

Upselling- we have all seen it many times.

Do you remember the last time you ordered a hamburger from a restaurant, the waiter asked you in an attempt to sell more food, “Would you like fries with that?”  Yes, that’s a popular example of upselling!

In simple terms, upselling is a common sales technique a seller induces to make a sale more profitable by selling add-ons or more expensive items.

How could you use the upselling tactics to make more sales from your ecommerce store?

Let’s look at the example of Fiverr.com and how they use the upselling tactics to sell more gigs.

Fiverr is a marketplace to for buying and selling small services with the price starting from $5. When you buy a $5 gig from Fiverr, in order to encourage you to spend more, you’ll be provided with an option to purchase extra gigs as an add-on.

Below are a few lessons you can learn from the Fiverr example to increase average order value.

• Offer add-on sales: Encourage customers to buy a closely related product as an add-on while they do shop. For instance, if you’re selling a laptop you can entice your customers to buy 2 years additional warranty as well.
• Sell more by default: Customers are so lazy that they even hesitate to buy add-on services along with their original purchase. By default, if you automatically add the upselling products to the cart, chances are they’d end up buying it as well. In fact, if they don’t actually need the add-on products they can always remove them from the cart before completing the order.

2. Cross-sell

Suggesting related products to your customers is one of the best ways to cross-sell from your store. Now the question is what products should you choose as “related products” while cross-selling? Below are a few ideas…

• Display popular products from the same category if a customer is on a specific product page.
• Display products based on the purchase history and preferences of each customer.
• Show “what customers also bought” section.

So while cross-selling, the general rule of thumb is to suggest products that are relevant to the page the user is currently is.

3. Product bundles

Product bundling is a tactic of selling a group of products as a package deal in discounted price.
Best of all, selling in bundles can help you sell more products in a single transaction, yet it is one of the most underutilized selling tactics.

Here are a couple of reasons why offering product bundles can be a great idea…

• Since the bundles offer discounts, customers often see bundled products as a deal
• Since it provides a cost saving to customers, bundled products increase the perceived value, so it influences in the purchasing decision of a customer as well.

Men’s socks ecommerce company, Nic Harry is a perfect example of selling bundled products as a deal. They sell limited edition designer accessories as style packs.

4. Free shipping threshold

These days everyone expects free shipping as almost every major retailer offer it. However, providing free shipping might not be a good idea especially when customers purchase a low-priced product.

In such cases, you may entice your customers to purchase more products from your store, so they can avoid paying the shipping cost. Make sure you highlight the shipping threshold right from the product page in order to avoid making your buyer disappointed at the final stage of the buying cycle and to reduce the shopping cart abandonment rate.

According to a comScore study, 58 percent of US online shoppers have added items to their shopping carts to qualify for free shipping, which clearly denotes that making a free shipping threshold can be helpful to increase the average order value.

5. Loyalty rewards program

Loyalty rewards programs are yet another under-utilized way of increasing average order value as well as increasing customer loyalty to your brand.

Let’s take a look at an example of a highly successful customer loyalty programs.

Shoemakers Van-Dal rewards their customers 1 point for every £1 spent. In addition, they also offer bonus 40 and 80 points for spending over £100 and £150 respectively on every single transaction, which can undoubtedly help to increase the average order value.

6. Optimize checkout page

Hostgator’s checkout page is a perfect example of optimizing the checkout page for increasing the average order value.

Have a look at the screenshot of Hostgator’s default checkout page below.

In this checkout page, you can see that Hostgator is trying to increase the AOV by 2 ways.

1. By default, they added hosting addons to the order.
2. As the default option, they chose the longest billing cycle (36 months)

Although Hostgator is not in the ecommerce business, the idea of optimizing the checkout page for improving the order value is totally applicable to any ecommerce business.

Optimizing your checkout page will probably look like an easy strategy to raise average order value. However, make sure your strategy doesn’t scare your end customers. One way to do this is by A/B testing with different versions of your checkout pages.

7. Offer discount on a minimum spend threshold

One of the easiest ways to increase average order value is by offering discounts on a minimum spend threshold. This can be a nice strategy especially when you have dead stock that needs to be cleared.

For example, if you’re looking to clear all of your dead stocks, rather than offering a flat discount, keep a minimum purchase threshold, which will entice your customers to spend more.

Which tactic is your favorite when it comes to improving the AOV? Share your thoughts with us in the comments section.