In the quest to increase revenue, marketers’ initial thought is to find more customers, but that’s not the only method to increase revenue.
Another perspective to view the growth of revenue is the average value orders.
If you increase the value of your Average Basket Value (ABV) or average order Value (AOV) as it’s often referred to, rather than (or instead of) trying to attract new customers, you’ll be able to get more value from your existing customers. It means you can increase the size of your business without putting advertising, marketing, or other expenses to the sky.
Ready to build a winning marketing strategy, have a positive grasp on your average order value and smash your business goals? CartCoders’ SEO Experts can help you find the right tools to increase your average order value while showing your customers you care about them, what they think, and how they shop online.
Let’s ensure that we’re on the same idea of what the average value of an order is and why it’s important.
What is Average Order Value (AOV)?
Average value of an order (or AOV) is among the most crucial metrics that eCommerce companies must keep track of. It’s pretty much as it implies, which is the amount of money that you pay for each order that is placed with your company within a certain time.
To understand how the people we spoke with about this issue and provide some an understanding of their recommendations We asked them each what their average value for orders is. The majority (nearly 75 percent) indicated that the average value of their orders was less than $100.
We also asked our participants to select which of the traffic and marketing channels had the highest AOV. The results were fairly divided, however the organic web, marketing via email as well as direct traffic, were the clear winners throughout the board.
How to Calculate Average Order Value
To calculate your Average Order Value (AOV), calculate your revenue total then divide by your total amount of orders.
Average order value = Total Revenue/ the Total number of orders
For instance, if you have an online store which sells marshmallows, in the month of October you earned $2,500 in total sales and 200 boxes of marshmallows were purchased.
The average value of your order will be $2500/200 = $12.5
This means that a consumer is spending $12.5 on average per purchase by your shop.
What is the significance of AOV crucial?
You may think about the reason for dedicating all of our report to an average value for orders.
What’s the significance of this measurement?
Simply put The greater your AOV the greater income you will earn from the same amount of customers. It means that you can grow revenues without increasing marketing or costs for sales in the same way. Aeverage order value optimization is an additional lever that marketers could use to increase the size of their company.
So when we asked us which strategies are employed by marketers in order to increase AOV, over 50% of respondents said they use every one of the four strategies mentionedabove: upsells cross-sells and product bundles and free shipping when there is an order minimum.
1. Email Marketing
Make a passive client active with personalized email marketing. Improve the average value of orders by using methods such as special offers and special discounts. There are a variety of options to consider:
- Subscriber-exclusive deals: Incentivize subscribers to sign up with exclusive email-only promotions and special offers. This could include coupons and discounts, as well as access to products with early release dates as well as packages and packages that are discounted.
- Retargeting abandoned carts: Identify customers who haven’t completed their purchase by sending them emails to motivate them to complete the purchase. The messages can entice them to take to take a second look, and ideally, a purchase.
- User-generated content: Make use of the effectiveness of user-generated material (UGC) in your emails by including reviews and posts on social media from real customers who use your products. In the Stackla report 79% of the 150 consumers and 1,590 B2C marketers who were surveyed reported that UGC influences their buying choices.
Any the email you are sending, you should use A/B tests to determine the most effective message for your clients. More tips for marketing via email are available here.
2. Programs for loyalty and rewards
Give your customers who are already loyal to you worth by providing rewards and loyalty programs to your existing customers. According to Accenture 57% of consumers prefer to spend more money when they feel that they are loyal to your brand.
The most effective loyalty and reward programs are simple to understand and use. This is a look at the ways certain brands are making their customers feel valued as well as connected with their offerings:
- Points program: Loyalty programs based on points have made significant strides from the days of a punch card in paper. There is no better brand to do this than Sephora because Their Beauty Insider loyalty program makes 80 percent of the sales. Through Beauty Insider, shoppers earn points per dollar spent which can be used to purchase bonuses at any moment.
- Tiered rewards: Following a model from Sephora the beauty retailer has three levels of rewards that increase with each. Insider is the no-cost starting tier. VIB is available to customers who spend at least $350 and Rouge is available for those who have $1,000+ customers who spend more than $1,000.
- VIP program: A VIP membership program Amazon Prime offers members many benefits , such as free shipping for two days on all Amazon products and access to television movies and shows, as well as discount prices at Whole Foods Market.
Create strong connections with your clients. Do something extra for them You’ll soon be surrounded by faithful fans of your company.
3. Cross-selling of similar products
Cross-selling is a common method to encourage purchases of higher value. It encourages customers to buy products that are comparable or similar to those they have that are in the shopping cart. Apply this strategy by showing products that your customers might be attracted to based on their preferences on the checkout and product pages.
What’s the best methods to increase cross-selling? UGC. Provide authentic content created by people and influential users. Show it on your website by displaying gallery pages with tags on products and inspire shoppers to explore new products. Also, you can show your existing customers that you appreciate them by sharing their content. Hello, customer retention!
Don’t believe us when we say it. Clothing brand Tuckernuck saw an increase of 140% in conversion rise and a 62X return on investment through the use of UGC on their home, gallery along with product and gallery pages.
4. Package bundles and item bundles
Why display a single plate when you can show the entire table? Bundle multiple items into bundles or packages so that clients can “shop the whole look” or design a gift box complete with accessories. Discounting bundles of these items is an excellent way to clear stock that is already in place while increasing the your average order value.
If customers have more opportunities to find products and products, they’re more likely get a higher average value for their orders. A study conducted by Statista found that shoppers are more likely to make online when they have access to an extensive selection of items (47 percent) or can compare more items (43 percent) or receive more information about the product (38 percent).
Not to be confused with cross-selling, it is the act of recommending a better version of an product. The most important aspect of upselling is to provide improvements or products that actually add value and improve the user experience. Examples include:
- Add-ons that are specific to the product: This includes selling bonus products such as warranties and protection of products rechargeable batteries for electronics, products such as ink cartridges and gift wrapping.
- Additional storage capacity: Technology companies such as Apple employ this strategy by charging more for extra iPhone gigabytes (GB).
- Huge Sizes: This method is extremely effective for items such as televisions, where larger is in reality more effective.
When you assist customers to gain by recommending premium products and presenting them with the options available They’ll be to you to see more.
6. Social UGC on pages for products
When customers visit an item’s website and are considering buying. A visual UGC on social media might help seal the deal. UGC gives social proof of what people actually like to purchase and the way products appear in real life. Customers are more likely to purchase a product if they can view images or videos that show your company in motion. The creation of galleries which feed content from social media is a simple way to accomplish this.
For Feelunique Europe’s biggest cosmetics retailer on the internet, UGC drives more than $10 million in sales annually. Through the use of social UGC on their pages for products, the company has also grown the average value of their orders by 32 percent. Win-win.
Through asking their followers to post photos of their products with the hashtag #feelunique or upload them to their website for the chance to be recognized, the beauty giant has created brand awareness and increased engagement.
7. Promo codes
Promo codes provide discounts of a percentage or in dollars on purchases. They are a simple method to run the storewide sale as well as holiday sales and specific discounts for brands that sell on e-commerce. The best thing about promo coupons? You are in control of the way they’re utilized.
Distribute coupons to subscribers to emails or show them on your banners on your website or pop-ups. You could use these codes to attract new customers or reward customers who sign up to receive mailers, or to promote the launch of your product.
8. Customer reviews
Reviews can have a significant impact on consumers and play a significant factor in increasing value of orders. The impact of reviews is dependent on their quality, frequency and number. According to Womply that businesses make 52% more money than the average company if they have nine reviews in the current time as well as 108% higher when you have over 25 active reviews.
Display current positive reviews everywhere you can: websites and emails, social media and paid advertisements. Tools such as Bazaarvoice ratings & Reviews will help you get more reviews, react to them and share these across the internet. Like our story of success using Officeworks.
With Bazaarvoice’s assistance The Australian ever-channel retailer has acquired more than 250,000 high-quality reviews and ratings to publish on their website, leading to an improvement in traffic, conversions, as well as the average value of orders.
9. Live chat
Live chat is among the most effective ways to customize your online shopping experience and offer quick and accurate advice to multiple customers at the same time.
It’s among the most efficient and simple ways to give customer assistance. While you are chatting with customers you can search their profiles on your system to look up past orders. It is also possible to quickly provide informative links to motivate users to visit your site further and find more items.
10. Free shipping on orders of a minimum
Shipping for free is an typical and widely-used nowadays and with good reason. Customers have become accustomed to it and it’s a great method to boost the average value of orders.
Make sure that you are engaging customers and keeping costs down by offering free shipping on orders of an amount. To determine the threshold for free shipping use the suggested minimum order amount and subtract from the average order value. Then, you can take the difference, and divide it with the profit margin gross. Finally, subtract the average cost of shipping.
The threshold for shipping should be greater than your average purchase amount to encourage purchases that are higher however, it shouldn’t be outside of the sensible spending limits. For instance, if your average order of $50 is a minimum of $200 to receive free shipping is beyond the typical amount of purchase.
11. Volume order discounts
Volume discount discounts are available usually offered for products that are purchased in large quantities, such as stamps, office equipment and toiletries, as well as alcohol.
“Buy X, get X free” deals are a common volume order discount. Case discounts too such as discounts of 10% on a case of wine. They can be a great way to convince customers to purchase between 9 and 12 bottles or from 3 boxes of printer papers to 4. Invigorate your argument by highlighting the amount customers can save by buying more.
12. Shoppable social media posts
Social media isn’t only for food photos, memes or FOMO nowadays. It’s also a place to shop. 42% of customers use Instagram as well as other social media platforms for research on products. This trend isn’t going to change anytime very soon. Business Insider estimates for 2021 that U.S. retail social commerce sales will grow by 34.8 percent to $36.09 billion by 2021.
Benefit from these benefits when you make your posts shopping-friendly. When Instagram users click on the items featured in posts that are linked to the product’s pages, they are able to instantly buy the item.
Contest marketing can be an enjoyable and enjoyable way to engage customers and gain knowledge about the contestants. By requiring customers to complete surveys when they enter a contest will ensure that the future marketing efforts are relevant and worthwhile. Following the contest, you can then follow up with offers that are targeted which increase the likelihood of getting customers to convert.
Think about offering contest prizes that are based on your product, for example, offering six months of service for free or a product for free. If you are confident that your product will sell themselves, those who win will appreciate the importance that your company’s name has to offer.
14. Innovative virtual services
The COVID-19 pandemic was a time when numerous businesses were forced to change their strategies and shift to virtualization in order to meet the quarantine rules. Businesses that usually carried out business in person were required to alter their offerings to accommodate the digital world.
Certain businesses, such as Custom furniture and design firm Interior Define — found this option helped not only keep sales steady but also increase their sales. When the company expanded their Guideshop storefront to include an online marketplace the value of their average order was up by 40%..
To implement this approach to adopt this idea, you can offer online versions of your service and develop alternative ways to purchase.
Improve the value of your order by utilizing authentic content created by users
The authenticity of your product is what drives the results. What’s more authentic than UGC -real people demonstrating the true worth of your product?
Bazaarvoice will help you locate the best tools to boost the value of your orders while showing your customers that you are concerned about how they feel, and the way they buy on the internet.
Are you ready to create a winning UGC strategy? Do you have an understanding of your average order value, and surpass your goals in marketing?
Boost Average Orders Value and Grow Revenue
Amount of orders is just one of many levers that you can use to boost any business’ bottom line. It’s one that requires very little additional marketing and advertising expenditure. Apply the tips from our experts above to use, and you’ll be seeing an increase in your average basket size and your revenue within a matter of minutes.
As you work to increase the average value of your orders it is also important to optimize your site to improve your conversion rate, so that you receive many more customers, and not only higher value orders.