3 min read
Have you been trying to figure out how you can increase your average order value for your online store or brick and mortar? This is one of the three levers you can pull to help increase your revenue. Whether you are a brick-and-mortar, B2B, or online business, increasing your average order value is something you should be looking to do in order to grow your top line.
If you aren’t sure how to calculate average order value, you can take your total sales for a set period of time and divide it by the total number of orders or tickets—whichever applies to your business.
In this article, we are going to share three simple ways you can increase your average order value starting right now. These are things you can do without having to get new customers or spend a whole lot of money.
Increase your average order value, increase your revenue.
1. Raise your prices
Let’s start with the simplest of the three. When I say “simplest” it is the easiest to implement, but it may be the hardest for you to mentally accept. I’m going to let you in on a secret—you can raise your prices. 😳
That’s right, you can raise your prices and you won’t go out of business. Now you are going to have a lot of reasons why your specific business can’t afford to raise prices, but I promise you, I have seen businesses in various socioeconomic levels successfully implement higher prices.
You don’t need to make massive changes to your prices necessarily, although there is a direct correlation between price and perceived quality, but you can most likely make a 10% increase in your prices without cause much of a stir.
Price is the number one indicator of quality.
2. Offer higher priced options
The law of averages is what will determine your average order value. In order to increase your average order value, you can simply add products or services that cost more than your current ‘premium’ offering. This will naturally lift your AOV by default.
The best example of this is Starbucks when they added their Trenta-size coffee or 7-Eleven with their increasingly ridiculous servings of sugary drinks.
3. Upsell, cross sell, or just plain sell
There are a lot of opportunities for you to sell additional products or services to customers who are buying from you already. It just takes a little creativity and, really, just offering the sale.
This is where you can implement upselling and cross-selling techniques.
I’m going to cover a few examples of how this relates to both B2C and B2B companies.
Upsell for higher volume purchase
When a customer has already committed to doing business with you, that is a great time to encourage customers to buy more and offer customers a small discount for buying more.
Vistaprint is the master of this. Whenever you buy something on their website, they make an incredible offer to you right after checkout. It’s usually something like “double your order and save 50% on the additional items.”
Another very common upsell is having a free shipping threshold when customers spend more. You have probably seen “Free shipping when you spend $99”.
The key is to set the threshold above your current average order value because that will raise your average order value.
Similarly, if you are B2B you can offer a discount if a customer goes from a one-time purchase to a contract. This will also create long-term, loyal customers.
Cross sell at checkout
When a customer is about to make a purchase, this is a great time to offer complementary products or services. If you have a Shopify ecommerce site, you can automate this process by installing Bold Upsell app.
This app will allow you to both upsell and cross-sell. We have used this app for other e-commerce clients and have seen great results quickly. The key is to understand what items complement each other. Typically, you want to cross-sell an item that is 10-20% of the cost of the original item added to the cart.
Just plain sell
This is going to blow your mind. Sometimes, you just have to ask for the sale. Yep, it’s that simple. When a customer is buying from you, always offer an additional product or service. But here’s where it gets tricky.
There are a lot of things that you do for your customers that add a lot of value—value that your customers are willing to pay for.
Think about things you may be doing free of charge and try charging for them. You might be surprised that you’ve been giving away things you can charge for.
Typically, this applies more to services. Common things like delivery, planning, assessments, coaching, styling, advising, and many others. Think about the things you do for your customers and the value you are creating for them. It might be your next service.