You launch an eCommerce store and start selling your products at a rapid rate. But, what if the average value of all the orders remains almost the same, low amount. What would you do in that case? How will you increase the sales and revenue of your eCommerce store?
Increase the Average Order Value of your store by making your customers buy multiple products and spend more money on every order.
What is Average Order Value?
AOV is the most popular eCommerce metric that is used to calculate the amount your customers spend on a web store while shopping. It is considered as the driving force behind major business decisions including advertising budget, store layout and pricing of the product.
How to calculate AOV?
Average Order Value = Revenue/ Number of order
The AOV of your business reveals quite good information about your customers and the performance of your web store over a particular period of time.
Why businesses should calculate it quite often?
Average Order Value is not related to the gross profit or margin. However, it offers an insight into these calculations which can be further used to increase AOV or ROI. Higher AOV indicates that you are getting more orders and customers.
Calculating AOV regularly will help you analyse the dips and peaks of the business and examine it closely.
Why focus on increasing the AOV of your business?
No matter which industry you belong to, acquiring new customers is quite a task. It requires a significant amount of investment to generate demand.
AOV is probably the most effective and inexpensive way of increasing revenue and cash flow. Increasing the traffic of your website involves numerous tasks like rigorous research and implementation of different marketing strategies whereas increasing AOV includes simpler tasks like installing a plugin for your shopping cart.
Optimising your business for increased AOV can save your business from the foreseen dips. Even if you have low traffic, you may enjoy a higher revenue with an AOV optimised store.
Implement these strategies to get your customers to spend more time on your Magento eCommerce store.
Create Product Bundles
Product bundling is an effective way of making your customers buy multiple items at once. Bundling refers to grouping a primary product with its accessories or other products that are used for similar purposes.
For instance, a guitar can be bundled with a tuner or case, or face cleaner can be bundled with a toner and moisturizer.
Bundling not only increase the AOV of your store but it also creates a personalised user experience.
You may sell the bundled products at a discounted price, however, it is not necessary. Sometimes, the availability of the prepackaged items can also intrigue the customers to buy it.
Try different bundling strategies and experiment with the prices to determine which strategy accelerates conversions and works best for the revenue.
Up-sell and Cross-sell
Most of the customers browse your website only because they want to buy products. Once they are in your store, it is up to you how you can convince them to buy more products.
You can use these two effective marketing strategies to increase your AOV.
Up-sell: Suggest a product that is more expensive than the one he is viewing. For example, if a customer wants to buy a 10-watt floodlight, drop suggestions of a 20-watt product.
Cross-sell: Suggest products that are related to the items he is viewing. For example, if the customer wants to buy a smartphone, you can offer him its cover or charger.
Offer rewards for customers
Why not offer an incentive to your customers to motivate them to spend more? Try out these incentive offers:
Promotions/Discounts: Offer them a discount for buying additional items or shopping upto a certain limit. Apart from this, you can offer them free shipping for spending a specific amount of money.
Reward Points: Reward your customers with points for spending more money. First of all, it will inspire your customers to spend more and secondly, it will foster customer loyalty.
Moreover, they can redeem these points later for buying gifts or other items.
Offering them the products they need is the best way to attract your customers.
The more relevant the product is, the more likely they will buy it.
Help your customers find the most relevant products with these keys:
Personalisation : Identify your customers and offer them a personalised shopping experience. It can be as simple as sending a welcome message or creating customer-specific landing pages. Feature specially curated product catalogues for your customers.
Recommendations :Many customers look for help while buying a product. As a merchant, you can use the search information for recommendations.
Search queries: Explore what your customers search for.
Geographical locations: Suggest the products they will need according to the weather and culture of their location.
Buying History: What they have been buying before can help you in determining more suggestions.
Customer segments: Use their demographics to prepare a suggestion list for them.
Customers keep quite concerned about the return policy of the eCommerce store. They always if they would be able to return the product or not if find it unsuitable. He will buy fewer things if unsure about this.
Researches state that they keep more items if buy more. It simply means they don’t have any intention to return the products, they just want to ensure the security.
Create an easy and simple return policy.
The Bottom Line
Introduce a relevant and easy shopping experience to make your shoppers buy more. The above-mentioned strategies will not only simplify the shopping experience but will personalise it as well. Eliminate the frictional forces and make your customers buy more.
Start the conversation
B2B eCommerce is the fastest growing industry. Leverage the full-featured Magento B2B store.