Type above and press Enter to search. Press Esc to cancel.


10 Ways to Increase Your Average Order Value

10 Ways to Increase Your Average Order Value

Finding more customers isn’t the only way to bring in more revenue from your online store. One of the best ways to bring in more income is to increase your average order value. 

In this post, we’ll go over: 

Reach more customers than ever

Start strong with our foolproof tips on how to get your eCommerce store up and running.

What is average order value and why is it important?

The average order value (AOV) is the average amount of money your customers spend when they order from your eCommerce store. 

Your AOV is an important benchmark for understanding customer behavior. By understanding what your AOV is and which products are purchased most frequently, you can figure out the best ways to increase it that would make sense for your customer base. 

Some of the main benefits of increasing your AOV include:

  • Increasing your sales revenue overall
  • Bringing in more revenue over a shorter period of time
  • Recovering the cost to acquire customers more quickly 
  • Increasing the lifetime value of your customers  

How to calculate average order value

The formula to calculate your average order value is as follows: 

Average Order Value = Total Sales Revenue / Number of Orders

You’ll need to know your total revenue and the number of orders to calculate your AOV accurately. An eCommerce platform may calculate these values for you so that you don’t have to crunch any numbers. 

10 ways to increase your average order value 

1. Create order minimums for free shipping

To get customers to add more products to their carts, you can offer free shipping if their order surpasses a certain amount. For example, you could offer free shipping for orders over $50. This is a common strategy that many online retailers use to increase their average order value. 

If you decide to offer free shipping with a minimum purchase amount, be sure to display this offer throughout your website: on the homepage, on product pages and at checkout.  

2. Cross sell complementary products

Whenever possible, display or mention complementary products to your customers to make a bigger sale. This can be as simple as mentioning which items pair well with one another in your product descriptions. Make it clear in your messaging and store layout that your items gain more value when paired with other products. 

Some eCommerce platforms give you the ability to add complementary products to each customer’s cart to encourage them to add more items. 

3. Upsell your products

Similar to cross selling, suggest the more expensive versions of your products and position them as a “better value” to increase your average order value. For example, on a product page for your older stock, display or make recommendations to your customers to check out your newer, similar (and pricier) products. 

4. Provide bundle deals and bulk options

Group your products that go well together or commonly sell together as “bundles.” This will encourage customers that were only looking to purchase part of a set to buy a complete (and more expensive) set, thus increasing your average order value. 

You can also offer slight discounts for purchasing more than one of the same item. Customers may see the savings that come with buying products in bulk and add more items to their cart. 

5. Start a customer loyalty program

Loyalty programs are a powerful way to build up your brand and your wallet. A study by Smile.io  found that loyalty programs increase average order value  by nearly 14% on average. Not only are they great for getting people to add more to their orders, they help increase customer retention.

6. Provide a more personalized experience

Use data to create more personalized and targeted shopping experiences that will increase your AOV. By looking at customers’ order history, you can create marketing campaigns with messaging and products that resonate with that specific audience. The more targeted and specific you can be with your marketing, the more likely customers are to spend larger amounts. 

7. Offer limited time promotions

No one wants to miss out on a great deal. Urgency can spark the need to add more items to cart. Try offering short-term discount codes (with a 24-72 hour window) certain items to increase your average order value. 

8. Gain customers’ trust with social proof 

Reviews and feedback from previous customers are examples of what’s known as “social proof,” and they can have a huge impact on purchasing decisions. Search Engine Watch found that 72% of consumers will only purchase a product after reading positive reviews. If you have glowing reviews for your products, be sure to display them prominently on your store’s webpages and marketing materials to entice and reassure customers. 

9. Give a free gift or gift card with purchase 

Everyone loves a free gift. Similar to the free shipping tactic we listed earlier, entice more people to click “buy” by offering a free gift or a coupon code with purchase. A store gift card or a coupon code offer encourages customers to purchase from you again in order to redeem itespecially if you attach an expiration date to your offer. 

10. Establish a flexible return policy

Now more than ever, it’s important to be both as transparent and as flexible as possible with your customers. A 2019 survey from UPS found that 73% of shoppers say that their returns experience affects how likely they are to buy from a retailer again. Creating a flexible return policy will help ease any anxieties or hesitancies that potential customers may have about making a purchase from you. 

Once you’ve established your return policy, it’s important to display it clearly to your shoppers. The most common places to put a return policy are your purchase confirmation emails, social media accounts and website banners. 

Get actionable insights from your eCom and brick-and-mortar stores in one place

Data is key to improving both your online and offline experiences. Make it even easier to see who’s buying what and when across channels with powerful analytics from Lightspeed. 

Watch a demo to learn more about our integrated eCommerce platform and retail POS system can help you grow your business. 

News you care about. Tips you can use.

Everything your business needs to grow, delivered straight to your inbox.

More of this topic:
Sales & Marketing

Browse more topics