How To Increase Your Average Order Value
Once we get a customer to our store and they get all the way through the shopping cart purchase funnel—how do we get that customer to increase the amount purchased? Now here is a little teaser for you, your best customers spend 5x more per order than the average ones.
Getting your customers to spend more money on each order is a great way to increase your average order value or AOV. If you don’t know your AOV you should get out your P&L from last month and make the calculation right now:
- AOV = revenue / number of orderrs
Ok, now I want you to create a google spreadsheet for this year and for each month we are going to track the AOV. Go back an do the calculations for the previous months.
The question is: how to improve that number (and thus our monthly revenue)?
First we need to know where we are at, what is our current AOV, and next we need a goal—let’s aim for 10% growth in our AOV next month. Now that we know our current AOV and we now have a goal of 10% growth, let’s talk about a few strategies to get us there.
Up-sell & Cross-sell
The first strategy we are going to discuss is up-selling: can you suggest a more expensive item during the browsing experience? Most shopping carts have this functionality built-in and if your cart doesn’t then you need to think about switching to a new platform.
Cross-selling offers the customer a related product or complementary product—Amazon does this very well and you should study their cross selling techniques as a wonderful example of how to cross sell.
Customer Reviews – A Requirement
If you don’t have reviews on your product pages then I am going to recommend that you do this first—today!
Reviews create confidence and this is what new customer need the most before they open their wallets and give you (a stranger) their credit card data. Reviews help you establish a relationship with customers and it lets them know that other people have trusted you and also been moved enough to write a recommendation.
Reach out to your customers and ask them directly for a review—your post sales process should include an automated email with the request for a review and even an incentive if they write one (i.e. discount on next order).
Shipping & Returns – Make it Easy
How many times have we placed an item in an online shopping cart only to find a complicated calculation matrix when we check-out?
Make shipping costs transparent and the return process seamless. Offer free shipping if possible and place your shipping and returns policy on each product page (in an information tab) so that customers don’t have to go searching for this important data.
Implementing these three strategies will increase your AOV—I guarantee it.