How to Increase Average Order Value: Practical Strategies for Ecommerce

Today, increasing your average order value is a great way to boost your revenue without attracting more customers.

We're not just making this up. Ecommerce analytics show that a 10% increase in average order value can lead to a 25% boost in overall profitability. That’s right—by focusing on AOV, you’re not just increasing sales, you’re also boosting your bottom line.

In this post, we'll share some strategies that have helped many online stores boost their average order value. Ready to get the most out of every customer interaction? All right, let's get started.

What is ecommerce AOV stand for?

AOV stands for Average Order Value in ecommerce. It's a key metric that shows the average total amount spent by customers per order on an ecommerce website or app over a set period.

How to increase your average order value?

Optimizing upsell and cross-sell techniques

Here are key strategies to enhance these techniques:

• Create product bundles with complementary items at discounted prices.
• Offer limited-time deals to create urgency and encourage quick purchases.
• Provide volume discounts to incentivize bulk purchases, using tools like AfterShip Email to send emails with incentives to inactive contacts who haven’t bought from your store in a long time. Motivate them to interact with your business again.
• Utilize customer relationship management (CRM) systems to track interactions and purchase history.
• Simplify the cross-selling process to avoid decision overload for customers.
• Balance upsell/cross-sell efforts to maintain a positive user experience.

A good example optimiaze upsell techniques is Savvy ecommerce merchants, they deploy upselling plays (like the ones you’ll find in this ebook) throughout the customer journey to achieve results like this. They're leveraging AI and tools like AfterShip Personalization to enhance customer engagement—allowing brands to tailor their upselling with remarkable precision, ensuring every customer interaction is an opportunity to win loyalty.

Leveraging Customer Loyalty Programs

One highly effective approach to achieving this is by leveraging customer loyalty programs. Here are some key ways to make the most of your loyalty programs:

1.Focus on Creating Experiences That Evoke Emotions Rather Than Just Offering Rewards

While discounts and rewards are important parts of any loyalty program, they shouldn't be the only thing you focus on. It's important to remember that emotional engagement is a big factor in keeping customers loyal. Think about creating experiences that resonate with customers by adding in some personal touches, giving them exclusive access to events, or showing your appreciation with a little something special for your most loyal customers. For example, a quick birthday message with a special offer can make customers feel appreciated, which strengthens their emotional connection to your brand.
You can use AfterShip Personalization to make the above happen.

2. Use advanced return platforms to ensure extended customer experiences.

Smooth return processes affects how people shop online by making it seem less risky. When customers know the return process is simple and customer-friendly, they’re more likely to try new products, buy in bulk, or choose higher-value items. When businesses offer smooth returns as part of their package, customers tend to spend more. It's all about giving customers the confidence to invest more in their purchases. Advanced return platform like AfterShip Returns can help you streamline returns and increase AOV.

In addition, it's a good idea to provide customers with the option to exchange their product for a new one helps to maintain customer satisfaction and loyalty. This strategy allows you to increase AOV, increase sales, and enhance the customer experience. You can use AfterShip Returns to provide an 'exchange' option with following strategies:

• Seamless Exchange Process: Make the exchange process as simple and user-friendly as possible. This encourages customers to opt for an exchange rather than a return, keeping the revenue within your store.
• Incentivized Exchanges: Offer incentives for customers who choose to exchange rather than return items. For example, you could offer a small discount or free shipping on the new item.
• Automated Workflow: Use AfterShip Returns to automate the exchange workflow, making it easy for customers to select the products they want to exchange and for you to manage these exchanges efficiently.
• Upsell and Cross-Sell: During the exchange process, suggest similar or complementary products that could interest the customer, potentially increasing the AOV.

3.Link loyalty benefits with the brand's website to Show customers offers as they're shopping

Integrating loyalty benefits directly into your ecommerce platform can improve the shopping experience. When customers see their loyalty points, available rewards, or exclusive offers as they're browsing, it encourages them to add more items to their cart to unlock these benefits. This seamless integration doesn't just boost AOV, it also shows loyal customers that they're worth keeping around.

Luckily, you can try AfterShip Popups and Forms to realize above things, this magic tool can enable your customers with a smooth shopping journey

4.Offer non-financial benefits to build customer-company identification (CCID)

Financial incentives are effective, but non-financial benefits can be equally compelling. Building Customer-Company Identification (CCID) involves creating a sense of belonging and identity with your brand. Offer unique perks such as early access to new products, invitations to exclusive events, or opportunities to participate in product development through feedback sessions. These benefits foster a deeper connection and make customers feel like they are part of an exclusive community.

5.Invest in strong data security measures to keep customers trusting you and protect their information

Trust is a cornerstone of customer loyalty. Investing in robust data security measures ensures that your customer's personal and financial information is protected. Transparent communication about your security practices and swift action in the event of a breach can maintain and even enhance customer trust. When customers feel confident that their data is safe, they are more likely to continue engaging with your loyalty program and making purchases.

These efforts not only boost AOV but also foster long-term customer loyalty, ultimately driving sustainable business growth.

Implementing effective shipment tracking software

Partnering with shipment tracking software like AfterShip Tracking is a good choice. It can provide a critical solution for any company that sells online, as it provides visibility into packages as they are shipped to the buyer. These solutions provide real-time tracking of the location and status of shipments as they move through the supply chain.

Companies looking to boost customer satisfaction and increase AOV would greatly benefit from order tracking systems in their operations.

Conclusion

As we've gone over in this post, upping your average order value is a great way to grow your ecommerce revenue without having to bring in more customers. By putting these strategies into practice, from product bundling to personalized recommendations, you're setting your online store up for some serious growth. The key to success is to keep testing, measuring, and refining your approach.

But there’s more you can do. Optimizing your AOV is just one part of the ecommerce puzzle. To make the most of your store, you need to make sure that every part of the customer journey is smooth – from browsing to the post-purchase experience. That's where AfterShip can help. Our tools can help you make your operations more efficient, keep your customers happy, and ultimately make more sales. Ready to take your ecommerce game to the next level? Get in touch with AfterShip today, and let's team up to make these AOV strategies work for your business. Your path to increased profitability starts with a quick chat. Why wait?

FAQ

Why you should pay attention to average order value?

AOV is considered one of the most important metrics in the ecommerce industry for several reasons:

• It provides insights into customer behavior and purchasing patterns.
• It influences crucial business decisions, including product pricing and marketing strategies.
• It helps in evaluating the effectiveness of marketing efforts and pricing strategies.
• Increasing AOV can lead to revenue growth and potentially higher profits without necessarily attracting new customers.

While AOV is valuable, it should be considered alongside other measures of central tendency, such as median and mode order values, to gain a comprehensive understanding of customer spending patterns. For instance, a few high-value orders can skew the mean AOV upward, masking the true typical order value. Therefore, focusing on moving the modal (most frequent) order value upward can be a more effective strategy for increasing overall revenue. AOV analysis can inform crucial business decisions, including product pricing, marketing strategies, and customer segmentation, making it an essential tool for e-commerce optimization.

How to calculate your online shop’s average order value?

The Average Order Value is calculated by dividing the total revenue by the total number of orders placed during a specific timeframe. For example, if your total revenue is $10,000 and you received 100 orders, your AOV would be $100.

How to measure the results of implementing strategies in your online shop?

If you want to know what your AOV marketing is doing for you, you’ve got to check out your ecommerce analytics. Tracking key metrics is really important for seeing what's working and making changes to improve things.

1. Before you start trying out new tactics, it's a good idea to get a baseline AOV in place.
2. Then, use your ecommerce platform's built-in analytics tools or integrate with specialized software to keep an eye on changes over time.
3. Keep an eye on things like conversion rate, revenue per visit, and customer lifetime value along with your AOV. It's really important to group your data by product categories, customer groups, and marketing channels so you can see which strategies are working best.
4. It's also a good idea to set up A/B tests for different AOV-boosting techniques to see which ones work best.

By checking in on these metrics regularly, you'll get a good idea of which AOV marketing strategies are really driving growth for your online store. That way, you can focus your efforts on what's working and make changes where needed.

What is the key to ecommerce AOV?

The key to ecommerce AOV is ''Sell more to people who want to buy!''. So it's a good idea to encourage your customers to add more items to their cart or choose higher-priced options while maintaining a positive shopping experience. It's about smart, strategic selling rather than aggressive tactics.