Online retailers tend to focus a lot on traffic and not so much about other parameters such as the Average Order Value.
You can get a lot of customers to your store, and spend a lot of resources on marketing and such. But if the customers end up only with small purchases then a lot of your efforts go to waste.
That is why AOV plays an important role in increasing your revenue and profits.
In this post we’ll go over:
- What is AOV?
- The importance of AOV
- How to increase AOV?
- Shopify apps for upsells & email marketing
What is AOV?
The average order value (AOV) is the average amount of money a customer spends on an order in your online store.
The formula is very simple:
Total revenue divided by the Total amount of orders = Average order value
So as an example, if you made $5000 in total from 100 orders then the average amount each customer spends per purchase would be $50.
If you have a Shopify store you can find these metrics in your customer reports.
The importance of AOV
AOV can help you assess the performance of your retail store, as well as understand the behavior of your customers.
What type of marketing strategies you apply or how you price your products can all affect how much customers are spending on each order.
That’s why it’s important to use such metrics in order to find, based on your customers and their shopping habits, which strategy would work the best for increasing sales revenue and profit margins.
The general idea here is using AOV to make more money out of customers you already have, instead of focusing only about obtaining new customers.
Such methods for increasing AOV are upsells, offering free shipping, emails, and loyalty programs(which we’ll go into some of them in more detail later).
How to increase AOV?
There are many ways for improving AOV results. We decided to go into detail and inform you with everything there is to know about 2 main tactics. So there is no need for you to further research.
Later on we’ll also go over different apps that are used to implement those tactics.
1. Upselling & Bundling
Upselling, cross-selling, and bundling are all similar methods to convince customers to buy more products, or choose more expensive products.
These types of products need to be in accordance with the customer’s wants and needs, and should come after the customer has made a decision on the product they’re interested in buying.
Upselling is suggesting to customers an additional product(s) they might be interested in buying.
Of course the suggestion should make sense to the customers, letting them know the additional product will come with an extra discount.
Decide whether the upsell appears before the actual payment or right after that – My personal suggestion is to show the upsell right after the purchase, when the customer already warmed up.
Create a package that includes a number of complementary items, offering the ultimate all in one solution.
It is recommended that the added items will be sold at a discount in the package, so that customers will be more inclined to buy it. This is a great strategy for selling more products and increasing your average order value.
You can also provide a customizable package where customers have the freedom to choose which products they prefer to be included in their package.
Always make sure the products actually go well together and that they genuinely provide customers a better experience or more value for their initial choice.
More tips about upsells:
Don’t overdo it. Recommendations should be where it is relevant, but too much can feel like you are trying too hard and that it’s not as genuine.
Really make sure the products you are choosing to suggest pair well together, and let the customers know the added value they’ll get from purchasing that additional item.
Offer affordable upsells – Customers are less likely to consider adding another high value item to their purchase if they didn’t plan on it. Offering cheaper addons, something that is significantly cheaper than their chosen product, is far more convincing and effective.
For example: Investing in a screen protector is nothing compared to the cost of a smartphone. But because it is so essential and much cheaper almost any customer will buy it.
Email marketing is super effective in creating a connection with your customers.
Like was said previously, there are many tactics for improving AOV but most of them have one thing in common(which is they are mostly put into practice via email).
With emails you have a direct way to reach your audience and make them buy more.
Here are a few ways to grow your AOV with email marketing:
If you analyze your customers browsing behavior, you can find which type of products they are most interested in.
Once you start recommending those products by emailing them to the customers, you’ll be increasing the chances of getting more purchases and ultimately increasing your AOV.
Here’s a great example of an email I got from Amazon after browsing on their website for hair towels:
It’s important the customer gets the feeling that these products were hand-picked especially for them. This deepens their relationship with your store and will show your customers that you truly care.
More so, according to research, it is found that brands using personalization generate 40% more revenue than those that don’t.
Abandoned Cart Emails:
This scenario is familiar to all of us, we start shopping online and filling the cart with products we like. Then for one reason or another, we leave the cart without checking out.
When a customer has left an item in your cart, an opportunity has come to you to remind them of the items they left and increase the likelihood of them purchasing those items.
That is why you should keep sending emails and get those buyers back to your store.
When you do send abandoned cart emails, make sure to include special discounts, related product recommendations, or a free shipping threshold to encourage customers to keep shopping.
Another important thing is the timing of the email, don’t wait too long but also don’t be too quick. In general, about 12-24 hours later is usually okay.
Offer Free Shipping:
Customers nowadays expect free shipping when shopping online. It is reported that 75% of consumers surveyed expect delivery to be free even on orders under $50, and most look into free shipping before they even start shopping.
Use this to your advantage and let customers know how they can get free shipping using email marketing.
The most classic way to do so is to create an order minimum for free shipping to your email subscribers and include a few personalized suggested items.
In order to set the right threshold for free shipping, it is important to check your average order value.
You want to set the bar a little higher from the AOV so that customers would choose to purchase more to get free shipping. However setting it too high will not be attainable to most customers and therefore will not increase revenues.
Shopify Apps for Upsells & Email Marketing
- ReConvert Upsell & Cross Sell
Rating: 4.9 with over 3000 reviews
Reconvert is a Page builder to build thank you pages that convert & upsell.
- One click upsell offers.
- Smart AI-product recommendation engine for personalized offers
- Product purchase upsell tracking
- Upsell after checkout page: optimize your thank you page and add upsells, cross sells, bundles, surveys, pop up discounts, upsell product recommendations.
- Professionally optimized funnel with automatic funnel generator.
- Quickly build a post-purchase upsell funnel with a professional look & feel that fits your brand.
- Analytics dashboard to see how post-purchase upsell funnels are performing.
- Drag and drop thank you page optimization tool.
All of these features and more are there to help you put upsells into action. It doesn’t require any technical expertise and provides you with any tools you might need.
Free trial for 30 days
Their plans are relatively affordable and differ mainly by the number of orders your store can have.
2. Omnisend Email Marketing & SMS
Rating: 4.8 and more than 4000 reviews
Omnisend is an Email & SMS marketing platform that helps you drive sales.
- Abandoned cart recovery emails
- Post-sales & order follow-up emails
- New subscribers (welcome emails)
- Customer feedback and product reviews
- A drag & drop email builder
- Ready-made, responsive email templates on any device
- Unique coupon codes
- Product recommender (up to 8 products)
This app is great for branded email marketing, lots of freedom and features and very easy to use.
The fact that their free plan includes almost all features is incredibly impressive.
3. ONE Upsell—Pop Ups—Email Marketing
Rating: 5.0 and over 2000 reviews
ONE is a platform both for upsells and email marketing, as well as pop ups.
- 3,000+ Ready-to-Go Themes
- One-Click Checkout – Countdown Timer Bar
- Upsell Bundles – Discounted Upsell Offers
- Cross Sell – You Might Also Like / Frequently Bought Together
- AI Recommended Products (Beta)
- Opt-In – Capture Leads / Birthday / Phone Number / Email Contacts
- Newsletters – Double Opt-In / Email Validation / Drip Campaigns
- Automations – Winback / Upsell / Cart Recovery / Thank You Page
- Abandoned Browse Recovery (Beta)
- Loyalty Program
- Post-Purchase Survey – AI Product Recommendation Quiz
- Interactive Games – Spin to Win Discounts
Overall this app is more upsell focused so it’s a great choice for users that are interested in an app that combines both. Integrates with many ecommerce platforms.
A free 30 days trial and a free plan as well. All plans are very affordable.
The average order value can tell us a lot about our customers, and our mission is to use that information to make our customers buy more and increase the AOV.
Some strategies work better than others depending on the type of shoppers that are targeted. And learning about your customers can help you decide which strategies are best to use and when.
In order to help you achieve the best results with as few barriers as possible, we recommended a few apps for your Shopify store, both for email marketing and upselling.
These apps are meant to help your customers discover and buy more products, as well as further engage them with your store and let you learn more about them.
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