One of the most important metrics for the growth of an e-commerce is precisely the AOV.

The Average Order Value is the average order value. In other words, it's how much each customer spends on average per transaction.

Calculating it is very simple:

AOV (Average Order) = Store Revenue/Number of Orders

Before revealing 7 simple strategies to increase it, it is important to briefly dwell on why it is so important.

Very often in an e-commerce we focus on:

• in increasing the number of customers
• in reducing the acquisition cost

Surely these metrics are important in a growth strategy.

It's a pity that these two variables also depend on external factors, such as advertising traffic.

And over time, the trend seems well defined..

Advertising costs are constantly increasing.

For example, on Facebook, the average cost of a thousand impressions almost doubled in 2021 compared to 2019.

With an increase in traffic costs, it is very likely that the cost of acquiring a new customer will also increase as a result.

For this reason, advertising cost is an important metric, but not the only one to consider.

While the Cost per Order is greatly influenced by external variables (such as the cost of advertising traffic), AOV is a metric that we can increase with greater control through different marketing strategies.

In this way, even if advertising costs should increase over time, by exploiting marketing strategies to increase the average order, you can maintain or even increase the store's marginality.

In fact, to increase the profitability of an e-commerce we can work on:

• Lower the Cost per Order (or customer)
• Increase the Middle Order (even in the first order)
• Increase the Life Time Value of a customer over time (bringing them back to the purchase)

In the next few lines, we are going to analyze 7 strategies to increase the average order (AOV).

Cross-selling: it is the sale of additional products or services that are directly related to the product that interests the potential customer.
For example, an online store for handmade footwear like Velasca offers several additional related products such as: a pair of socks, wooden knee-highs for holding shoes and even a leather wallet.

It's important to think about what additional products a customer who buys that X product might need. The imagination here is almost endless:)

From the analysis of the order data, you could find the best-selling products and insert them in a section on the product page as recommended items.

• Upselling: it is a strategy that may seem very similar to the previous one but in reality it is different.

Upselling usually encourages customers to buy a “higher value” (defined premium) version of a certain product, compared to the initial product they wanted to buy.

Usually this technique is used with a dedicated offer to promote limited series products and make them more exclusive.

• Bundle: it is a promotional offer where two or more products are sold in a complete package.

They are usually complementary products sold at a slightly discounted price to facilitate their purchase.

This type of offer works very well if you have several products in the same category and it lends itself very well to a gift product.

Like Beardbrand.com, for example, which offers premium products for beard shaving and allows you to create Personalized Kits with the desired products using promotional bundles.

• Quantity discount: it is a strategy that involves offering a discount if additional quantities of the same product are purchased.

Among other examples of incentives to increase the average value, you could offer 50% on the second item. In fact, it is as if the actual discount were 25%, if we consider that the total purchase is of two products.

This offer is very effective for 'consumable' products and could also have a positive impact on the loyalty rate.

In everyday life, how many times have you seen the offer of 3x2 (buy 3, pay 2) at the supermarket?

It is usually made to attract attention with “owl products” and push you to take advantage of the offer.

Once you arrive at the supermarket it will be hard not to resist the temptation to buy more products:)

You could also use this strategy during a balance period, in the case of renewing your inventory to “get rid” of some products in stock.

Even in the case of an e-commerce, the same principles could be applied, perhaps in combination with other upsell and cross-sell offers to increase average order and margins.

As in the case of our client JNPR, where we have successfully applied all these strategies with excellent results.

The strategic process was carried out in 3 phases. In summary, we have:

1. Analyzed sales data: the most sold products and any correlations between buying patterns (for example which products are usually purchased together).
2. Defined the cross-sell, upsell, quantity discount and related pricing strategies.
3. Implemented the technology stack. We inserted a 'popup' that was activated after each product was added to the cart, offering various exclusive offers for the user (as you can see below in the photo).

In a few weeks we witnessed a x2 of the average value per order (AOV).

If you have a store on Shopify, I recommend that you use the app. Candy Rack if you are interested in using an 'up-sell popup' like the example here in the photo by JNPR.

There are several times during the buying process when you might use these strategies. In particular, you could propose offers:

1. Immediately after adding to the cart (as in the example above)
2. In the shopping cart. Either in the mini cart or directly in the cart. If you use Shopify, I recommend that you take a look at the apps. Monster Upsell And the app Cross Sell
3. On the order thank you page. With Shopify you can do it with the app Re-Convert upsell

You can do different tests to evaluate its effectiveness, analyzing the store's conversion rate and the various drops off in the checkout.

In addition to the 4 strategies just seen, there are actually 3 other very simple techniques:

• Optimize your purchase limit to get free shipping.

By placing free shipping slightly higher than your average order, you could stimulate the purchase of an additional product just to avoid paying shipping costs.

Usually this technique, however simple, is very effective because shipping costs are perceived as a cost that people don't like very much.

• Offer free returns on some products to increase the store's conversion rate.

One of the main causes of refusing to buy is precisely the fear that the product ordered is not exactly what you wanted.

As Amazon teaches, there is no better reassurance than offering free returns to overcome this customer objection and encourage them to buy.

By offering free returns, in practice, you protect the potential customer by removing any risk of the purchase because they can try it and decide later.

• Give a free product that is usually not available for sale in your store, but is a 'gadget'.

Everyone loves presents.

Why not offer a small surprise as a gift to reward customers with a better shopping experience?

Small gestures are still appreciated even in online purchases:)

Bonus Tips: the average order is also linked to the Life Time Value of a customer.

There are some businesses and products where the average order is generally low, but they have a very high life time value and increasing over time.

It often happens that many first-time customers prefer to “try the product” with a minimum quantity. After seeing the satisfaction of the product, they tend to buy more quantities and consume them regularly.

Think, for example, of a store that sells drinks. The first time you might not buy 20 bottles, without having tried them.

It is much more likely that, after having tried and appreciated them, you will order a larger quantity to stock up or give them as a gift.

In this scenario, it is really important to work on increasing the customer's Life Time Value to raise the average order in subsequent transactions.

In fact, you could think about defining:

• a Loyalty Program that stimulates customer repurchase and loyalty by offering special conditions and rewards.

• a Referral Program to encourage organic word-of-mouth and reduce the Cost per Order. Customers who come from referrals are almost 'at no cost'.

That said, I wanted to conclude the article with two important tips to consider before defining the next tactics to increase the average order.

In particular:

• Consider the marginality for each product. It doesn't make much sense to offer an upsell/crossell product with a significant discount, if then there is no actual marginality on that particular product.

You would find yourself having a higher average order, but a lower order marginality.

• Offer upsell/cross-sell products that have the highest conversion rate.

If you use Google Analytics or any other data analysis tool, you can find out which products have the highest conversion rate.

If you offer a product that has a high conversion rate as an additional sale, it is easier for it to be added to the order.

If you are interested in learning more about other important KPIs to monitor for the growth of your e-commerce, I recommend that you continue reading with this article: 6 Fundamental Metrics to Increase Your eCommerce Sales