It’s not groundbreaking to say there are many ways you can increase your store’s revenue.
You can grow your traffic for instance. It’s not a given but still, with more visitors you should get more sales as well.
You could also focus on improving the number of conversions on your site, to turn more visitors into buyers.
Or you could try to increase your average order value (AOV) to get your customers to spend more.
Most ecommerce owners focus on the first method. Many work on conversions too. Very few, however, try to increase the AOV, even though it’s the simplest way of them all.
At first glance the reason for doing so is obvious: to increase revenue. But the same argument could be made in relation to increasing traffic, for instance. Or working on greater conversions.
So to go deeper, here are few other benefits:
There are many ways to increase average order value. Below I am highlighting 7 of the most popular ones.
Shipping is by far the biggest pain point of many customers. In fact, 44% of online shoppers abandon carts because of the cost of shipping is too high.
At the same time, 40% of customers say they are willing to buy more items if they qualify for free shipping (Deloitte). Therefore, by setting a minimum purchase amount that qualifies for free shipping that is slightly above your current AOV, you can increase the amount of products your customers will purchase at your store, and thus your revenue.
(Euroffice offers free delivery on orders over £40)
Customers often procrastinate and delay making the buying decision. One reason for that is that they constantly shop for discounts and need a push to make a sale.
A sense of urgency motivates customers to take action right now. Without it, they will prolong making a decision until they either find a better deal or run out of options.
Grouping two or more products that complement each other and offering them as a bundle is another way to get your customers to spend more. Product bundles are often sold with a discount to make it worthwhile for customers to buy bundled products together.
Similarly, you can offer discounts for bulk purchases of the same product. Berkeley Systems offers discounts from 5% to 15% depending on how many items you buy.
When launching this strategy however, make sure that you work out the right discount amount. It has to be one that doesn’t eat up too much of your margin. At the same time, it must be attractive for your target customers.
This is by far the most common technique used to increase the average order value. Suggest additional products your customers might be interested in before they complete the purchase. Ideally, you should include them not only on the product page but also on the checkout to target impulse decisions as well.
Similarly, up-sell your customers, too. Up-selling happens when you convince your customer to spend more than they originally intended. You could do this by recommending a higher priced alternative to the product they wanted to purchase originally or offer add-ons (like extra warranty, for instance) to the original item.
But beware-it’s extremely easy for this strategy to go horribly wrong if you turn into a pushy salesman. There is a way up-sell properly and I’d suggest you familiarize yourself with those ways.
(Laptops Direct includes a number of up-sells on their product pages)
I am personally very fond of subscriptions. They are not only a great way to increase your AOV, but also a long term revenue stream. When someone signs up for a weekly, monthly, or whatever package, they ultimately commit to giving you money for few months at least. Offer subscriptions on the most commonly purchased products, if possible. Some examples include office supplies, food, snacks, grooming products, pet food etc.