It's quite simple really, the average value of a single purchase by customers over a given time period. Most ecommerce or accounting software will help you to easily find this number.
Knowing your average order value will assist you to make decisions regarding pricing, customer service strategies and the overall operation of your business. We will preface this by saying that when you want to improve one growth lever such as average order value, you will see changes in other levers such as conversions or life time value of a customer. You want to look at your business as a whole, making sure all your strategies are complementing each other. With that said, let’s look at 15 ways to increase your average order value.
Offer your customers complementary products or services that go along with what they are buying. For example, if someone is buying a shaver, offer them shaving cream as well. This can be done on your website through a frequently bought together banner or by your staff asking customers at the time of purchase.
The aim here is to get the customer to purchase a higher value product. Focus on the benefits and features of the higher value product. Something to note here, you don't want your customer to walk away with a bad taste in their mouth. Only upsell them if they can truly benefit from the higher value product.
Place complementary products near each other in your store. This is essentially cross selling but does not require any additional effort from your employees. A wall of phone cases right near the phones. It’s a no brainer.
Training staff to be aware of opportunities to upsell/cross sell your products is a great way to increase order value. A well trained team is a huge asset in your business. Spend the time to train them.
Despite a well trained sales team, we all need a little motivation every now and then. Running a competition will give your team a boost to increase sales. This can also work well for other strategies such as increasing leads.
Like competitions, targets can be used to measure employee effectiveness but also provide motivation for them to work a little harder. Make sure your targets are realistic and attainable. Otherwise this will negatively impact your employee morale. You don’t want to increase your bottom line at the expense of your employees.
Pair items that often sell together. They may be related items or completely different. Find out what items customers often buy together and offer a package. Use your inventory management system to analyse your customers purchases.
Offer bonus loyalty points for shopping over a certain amount. If you know that most people spend around $50 per purchase, offer bonus loyalty points for everyone that spends over that amount.
The good old buy two get 50% of the third. Whichever combination you should, make sure your customers are willing to take up the offer. Cotton On is a good example of this. They always have offers to increase the number of items purchased at once.
Some store layouts are specifically designed to keep consumers in there for longer. We all know the longer someone stays in your store the higher the chances they will buy more. Ikea is a leading example of a store layout that provides a great experience for customers and increases the time spent in the store. This will also include how you display and merchandise your products.
We've all walked through the maze of products while lining up for the checkout. Often a mix of lower priced consumable products that we need to buy regularly anyway. It just provides a gentle reminder as someone is lining up to purchase.
This is a very common strategy to increase average order value. A pop up that lets the customer know they can get free shipping if they add a few more items in their cart.
Offering flexible payment options can increase the amount a customer spends. If they are using a buy now pay later service such as AfterPay or ZipPay, they will likely reason that it's only a few small weekly payments instead of a large sum.
When you are conducting research into your average order value, see if you can determine when it is the highest. If you can find out why it is the highest at certain times you can try to replicate it. Perhaps it is a particular sales team member that is awesome at their job. Get them to assist in training other staff members. Always be on the lookout for trends in sales.
Offering a discount when someone purchases in bulk can increase order value. Obviously it will decrease the number of transactions per year but does guarantee that the consumer won’t need to explore your competitors for a while.
There you have it, 15 ways to increase your average order value. As we mentioned earlier, it's important to look at your business as a whole when adjusting your growth levers. Every change you make in one area, will have an impact on another area. Check out our Growth Calculator which will help you to determine what changes you can make to grow your business.
To find out other ways to grow your business, check out our Business Success Map. A free resource (no email address required) that is designed to help business owners work on the right things at the right time.