How to Increase Average Order Value: 10 Strategies That Work

Increased conversions and rising customer footfall do not necessarily guarantee an increase in average order value (AOV).

So, how to increase the average order value over time?

In this blog post, we present some effective strategies that can encourage customers to spend more during each transaction.

Continue reading to find out.

What Is Average Order Value?

Average order value is a key eCommerce metric that represents the average monetary value of orders placed on a website during a specific time period. In other words, AOV provides insight into the average amount a customer spends each time they purchase on a particular platform. It is calculated by dividing the total revenue generated by the number of orders received within that period.

10 Proven Ways to Increase Average Order Value

We’ve tested out these strategies, and they yielded positive results. They will certainly help you too.

1. Use Exit-Intent Popups

Exit-intent pop-ups, such as Picreel, appear when a user is about to leave your website, offering a special discount or promotion to entice them to stay and make a purchase.

These pop-ups can be an effective way to increase average order value by offering an incentive to spend more before leaving.

Picreel is our go-to tool these days. We’ve been using it for the last few years. It enables us to create customized exit-intent pop-ups with targeted offers.

By personalizing and tailoring these pop-ups based on the customer’s browsing behavior, you can make the offer more relevant and compelling. This increases the chances of them making a larger purchase.

Pro tip: Utilize the features and analytics provided by tools like Picreel to track user behavior and design effective exit-intent popups that resonate with your audience.

To know how to increase average order value in eCommerce, watch this video:

2. Optimize Product Pages

Source Image: Freepik

Optimizing product pages can significantly enhance user experience, improve SEO ranking, and increase conversion rates.

It can also help increase average order value by making it easier for customers to find additional products or upgrades.

For example, you can showcase related products on the page or offer bundles or product variations to encourage customers to spend more.

Pro tip: Include customer reviews and ratings on product pages to build trust and encourage customers to make additional purchases.

3. Engage in Strategic Pricing & Shipping Tactics

When you use strategic pricing and shipping tactics, it can incentivize customers to spend more.

For example, offering volume discounts or tiered pricing can encourage customers to buy more of a product.

Similarly, offering free or discounted shipping for orders above a certain amount can motivate customers to add more items to their cart.

Pro tip: Use pricing and shipping tactics strategically. Ensure that you still maintain a healthy profit margin while doing so.

4. Upsell and Cross-Sell

Upselling involves encouraging customers to purchase a higher-priced product or a more premium version of the product they are considering.

Cross-selling, on the other hand, refers to suggesting complementary or related products along with the initial purchase.

For example, we often see clothing retailers upselling their customers from a basic t-shirt to a more expensive designer brand and cross-selling by suggesting jeans or accessories to complete the outfit.

Using tools like Shopify upsell apps can streamline this process by making personalized suggestions based on customer behavior and preferences.

Pro tip: Use data analysis to identify patterns and preferences among customers and make more targeted upsell and cross-sell suggestions.

5. Offer Free Shipping

Free shipping is a powerful incentive that can boost average order value. For many customers, it’s one of the criteria for shopping online.Customers often look for ways to avoid shipping fees, so offering free shipping can encourage them to add more items to their cart to qualify for the offer.

In fact, 9 out of 10 consumers say that free shipping is the top incentive that would make them shop more online (Walker Sands).

Pro tip: Set a minimum threshold for free shipping to ensure it aligns with your profit margins and encourages customers to spend more.

Case Study: How a marketing agency saw a massive 36% increase in its revenue after adopting one of these AOV strategies.

6. Create Customer Engagement & Loyalty Programs

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Engagement and loyalty programs can encourage repeat purchases and increase order value.

For instance, offering rewards points for every purchase can motivate customers to spend more in order to accumulate more points.

Additionally, providing exclusive discounts or early access to new products for loyalty program members can further incentivize larger purchases.

Pro tip: Use personalized emails or notifications to remind customers of their loyalty program status and available rewards.

7. Build Trust and Authority With Social Proof

Social proof plays a vital role in business by increasing credibility and trust among customers. It works through the validation of others’ experiences, leading to higher brand perception and conversion rates.

Social proof, such as customer reviews, testimonials, and ratings, can help build trust and authority, ultimately driving higher-order values.

Image Source: Amazon

When customers see positive feedback from others who have purchased the same product, they are more likely to trust the brand and make larger purchases.

Pro tip: Actively request and feature customer reviews. Consider using social media influencers to showcase your products and increase credibility.

8. Offer Limited-Time Special Promotions

A sense of urgency plays an important role in promoting a product or service. It creates a psychological trigger that encourages customers to take action quickly and makes them feel that they might miss out on an opportunity if they delay their decision

In eCommerce businesses, creating a sense of urgency with limited-time offers can increase average order value.

For example, offering a discount or a buy-one-get-one-free deal for a limited time can encourage customers to buy more immediately to take advantage of the offer.

The following is an example of such offers that we often come across.

Pro tip: Clearly communicate the end time and scarcity of the promotion to create a stronger sense of urgency.

9. Use Innovative Marketing Strategies

Innovation in marketing strategies is crucial for staying ahead of competitors and capturing customer attention. It enables businesses to effectively communicate their unique value proposition and adapt to evolving consumer needs.

Embrace innovative marketing strategies, such as personalized product recommendations, targeted email campaigns, or social media advertising, to increase average order value.

By tailoring your marketing efforts to customers’ preferences and purchase history, you can encourage them to buy additional or higher-priced products.

Pro tip: Leverage automation tools and analytics to customize marketing messages and improve targeting.

10. Give a Free Gift or Gift Card With Purchase

Image Source: Freepik

From a psychological perspective, humans are inclined to seek and acquire resources without expending too much effort or cost. This desire for free things stems from a variety of reasons, such as saving money, the thrill of getting something for nothing, or simply wanting to maximize personal gain.

Offering a free gift or gift card with a purchase can similarly motivate customers to spend more to receive the bonus item.

For example, a beauty brand could offer a free makeup brush set for purchases over a certain amount.

Pro tip: Ensure the free gift or gift card aligns with your customer’s interests and preferences to maximize its appeal.

How to Calculate AOV

To calculate the average order value, you need two pieces of information: the total revenue generated and the total number of orders.

Here’s the formula for AOV:

AOV = Total Revenue/Total Number of Orders

Let me share an example to explain this better:

Suppose an online retailer generated $10,000 in revenue in a month from 500 orders.

To calculate AOV, plug these values into the formula:

AOV = $10,000/500

The final value is $20

So, in this example, the average order value of $20 means that, on average, each customer placed an order worth $20.

Knowing the AOV is valuable for businesses as it provides insights into customer spending habits and helps in better pricing, marketing, and promotional strategies.

Motivate Your Customers to Spend More

That was all about how to increase the average order value.

By implementing these tried and tested methods, you can get several benefits. They include increased revenue, greater profit margins, improved customer lifetime value, enhanced customer experience, better inventory management, and competitive advantage.

Experiment with these best practices and cling to those that work best for your business.

The idea is to motivate your customers to spend more dollars on your products while also providing them with special offers from time to time.

Exit-intent popups can be one of the earliest strategies you can employ to increase average order value. These tools can stop visitors in their tracks when they are about to leave your website and entice them to make a purchase they may have otherwise abandoned.

Know More About Average Order Value

Why is AOV important for my business?

Average order value is important for your business because it indicates the average amount of money customers spend per transaction. A higher AOV means customers are spending more, which can lead to increased revenue and profitability.

What is a good AOV?

Though it depends on the industry and business model, an AOV can be considered good when it is on the higher side. This indicates that customers are purchasing more expensive products or adding more items to their carts, maximizing the value of each transaction.

What does AOV tell me?

It tells you how much revenue you can expect per customer on average. It helps you understand customer behavior and purchasing patterns, allowing you to tailor your marketing strategies and sales tactics more effectively. Additionally, AOV helps you identify whether you are attracting high-value customers or if there is a need to improve customer retention and loyalty.