Many small business owners feel as though they’re always chasing after new customers in a bid to grow. There’s no denying that getting new customers is important, but that’s not the only thing to think about. Your Average Order Value (AOV) can also do a lot for growth, success and sales, even more so than increasing the number of customers you have. By increasing the average amount of money a customer spends when they place an order, you can improve your bottom line, without having to increase your marketing or sales budget in a big way.
3 Reasons to Boost Your Average Order Value
1. It’s Cost-Effective
Getting new customers is expensive, once you factor in the cost of ads, marketing and SEO. But, increasing AOV enables you to get more money out of the customers you already have, making the most of your current efforts.
2. It Improves Profit Margins
Many of your costs-like packaging, processing payments and admin-stay the same for each order. When customers spend more on each transaction, those costs make up a smaller part of the total sale, which makes the business more profitable.
3. It Improves the Customer Experience
Increasing AOV doesn’t mean pushing products onto customers that aren’t needed, it’s about helping them to find more value in the products or services they’re already buying. This improves the customer experience, making them more likely to become loyal, long-term customers.
10 Ways to Raise Your Average Order Value
There are various ways to increase AOV, and you can choose to focus on one or two, or go allout and create a strategy that utilises more.
1. Sell Product Bundles
Bundle similar items together and sell them for a little bit less. Bundles make it easier for customers to choose what to buy, highlight what goes well together, showcases more of your product range and makes the entire bundle seem more valuable.
2. Offer Free Delivery
One of the best ways to increase AOV is to offer free delivery when customers spend a certain amount. For example, making delivery free for all orders over £50. You’re likely to find that some customers buy more just to meet the requirements, which raises your AOV without you having to do much.
3. Use Upselling Techniques
You can increase AOV by encouraging customers to buy a better version of something they’re already thinking about buying. For example, paying more to upgrade to a premium version, or paying more for a larger product.
4. Cross-Sell Complementary Products
Suggest things to customers that would go well with what they’re already buying. For example, accessories to go with an outfit, or adding extras to a hotel booking. This works best when customers are about to pay and finalise their order.
5. Offer Discounts for Buying in Bulk
Many customers will end up spending more if discounts are available. For example, buying two products and getting 10% off, or getting 20% off if they buy three. This works especially well for items that people use up or buy again, as they’re going to be happy stocking up.
6. Use Limited Time Offers
A sense of urgency can encourage customers to spend more. If they’re already on the fence, or they’re considering buying in the near future, a limited time offer can sway them into taking the plunge then and there.
7. Create Loyalty Incentives
Create loyalty incentives and make sure there’s a perk of spending more with your business.Points systems, special deals for people who spend a certain amount and early access to products all work well. This makes customers want to return and buy more.
8. Make Products Look Their Best
Sometimes, all you need to do to raise your AOV is show off your products a little bit better.Make sure you’re using high quality images, writing descriptions that are easy to understand, highlighting product benefits and showing products being used. Customers are more likely to spend money when they feel confident about what they’re buying.
9. Give Customers the Option to Add Extras at Checkout
It’s not uncommon for customers to buy things on impulse, especially at the checkout, so consider offering them extras at the end of their buying journey. Gift wrapping, personalisations and upgrading a warranty are all popular. These simple, affordable extras can really raise the AOV.
10. Use Pricing Psychology
You can change how customers act by changing how you showcase prices. Put higher priced items next to more affordable products, highlight the products that are ‘Most Popular’ and show how much money they can save. When given the choice, it’s not uncommon for customers to choose the middle or best value option.
There’s More to Growth Than Getting New Customers
Getting new customers is always going to be part of growing a business, but it’s not the only way to approach growth. As a business owner, you’re likely to find that you can make more money, boost your profits and give your current customers more value by focusing on raising the AOV of your products. You don’t need to overhaul everything at once, and starting small is usually the best approach. Try out one or two of the ideas mentioned above and see what happens, and then build on what works. Even small increases in AOV can help your business to grow, as these small increases quickly add up and compound over time.
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Many small business owners feel as though they’re always chasing after new customers in a bid to grow. There’s no denying that getting new customers is important, but that’s not the only thing to think about. Your Average Order Value (AOV) can also do a lot for growth, success and sales, even more so than increasing the number of customers you have. By increasing the average amount of money a customer spends when they place an order, you can improve your bottom line, without having to increase your marketing or sales budget in a big way.
