10 Simple Ways to Increase Average Order Value

You don’t necessarily need more customers to make more money – you just need the people you’re already attracting to increase their spend.

While many businesses are instinctively focused on finding new customers, the smart ones realise that increasing their average order value offers an alternative way to boost revenue without large marketing expenditure. It’s about extracting the most value from the customers you’ve already worked so hard to get – and the great news is it doesn’t have to be difficult to achieve.

Read on for some simple ways to get started.

What is Average Order Value (AOV), and why is it important?

Before we get into the meaty parts, let’s first make sure we’re all on the same page.

Average Order Value (AOV) is basically just as it sounds – the average amount a customer spends when they place an order with your business.

To work out your overall AOV, simply calculate your total revenue over a given period of time and divide it by the total number of orders.

You may of course decide to take this much further, for example by looking at the average value from different marketing channels or traffic sources – or segmenting according to demographics and other metrics to uncover statistical correlations.

That brings us neatly onto things that can affect AOV.

In reality, there are a huge number of things that impact upon how much a customer spends, on average, when they make an order.

Some things that can affect AOV include the range of products, pricing, industry, website experience, promotional offers, payment and delivery options, etc.

AOV can vary wildly depending on the traffic source and how loyal the customer is to the business. For example, an email marketing campaign sent to existing customers may generate a higher AOV than social ads simply because those customers already had a pre-existing relationship with the business.

10 Ways to Increase Average Order Value

The higher your AOV, the more revenue you will earn from the same number of customers, which is why it makes so much sense to maximise this as much as possible. Thankfully, there are lots of different ways to encourage more spend.

1. Set a minimum order for free shipping

Customers love free shipping – and many people will be willing to spend a little more to get it. After all, if your basket comes to £42 but you spot that the store offers free shipping when you spend £50, it’s very tempting to add a couple more items to your order.

The trick is to set the threshold at a level that seems attainable to most customers. For example, you might set it at 30% above the current average spend. Make it too high and you might find that more people abandon their cart, so it’s important to find the right balance.

Get it right and it’s a win-win for both you and the customer

2. Order discounts

Another simple idea is to offer a discount when the customer spends a certain amount – like £5 off when you spend £50, and £10 off when you spend £80.

You could also offer a percentage discount – or introduce a fixed minimum spend, like £5 off when you spend £40 or more.

Again, this is a fantastic way to offer people even better value for money while also providing an incentive for them to make a bigger order.

3. Gift cards

The great thing about gift cards is that they can encourage a higher spend, while also increasing the likelihood of the customer returning to your store again in the future.

For example, you might offer a free £5 voucher when the customer spends £60, or a free £10 voucher when they spend £100.

Just be sure to calculate the viability of the offer in terms of profitability – and always provide transparent rules on how long the voucher is valid for, how it can be spent, etc.

4. Product bundles

Another easy way to increase average order value is to bundle together some of your most popular products, perhaps with a slight discount on what it would otherwise cost to buy them separately.

This is both convenient for the customer and increases the perceived value, providing everything they need in one great value package. The chances are the customer wouldn’t otherwise purchase every single item in the bundle, meaning more money for you.

As well as putting together pre-packaged bundles, you might also consider allowing your customers to create their own packages.

5. Upsells and cross-sells

When you go to McDonalds, you’re probably familiar with the cashier asking: “would you like fries with that?”

In the same way, you can offer complimentary products to go with the item the customer is already buying (cross-sell), or an upgraded version of the same item (upsell).

How about some nice cushions to go with that new sofa? 

If it’s a computer, would they like to upgrade the RAM or hard drive?

Amazon once claimed that 35% of its revenue comes from such tactics, so it’s easy to see why this can be so beneficial to the success of your store.

6. Special promotions

Supermarkets do this all the time…

‘3 for 2 on all chilled party food.’

‘Buy any 3 for £10’

You can use the same tactics in your online store to increase average spend and drive sales. Many retailers use seasonal mix and match offers to incentivise sales, like at Christmas or during the summer holidays.

7. New customer discounts

Offering exclusive discounts to new customers is an effective way to encourage first time visitors to actually make an order AND spend more at the same time. 

As an example, you might offer 10% off their first order, etc.

The more they spend, the bigger the discount they receive, so there’s a real incentive to make a sizeable order. You can also combine this with follow-up offers to encourage them to come back again and again.

8. Time-sensitive offers

Time-sensitive promotions are another brilliant way to increase average order value – and they can also boost conversions, too.

Why do flash sales and other time-limited offers work so well? They force us into action and incentivise a larger order to make the most of the discount. After all, we all hate to miss out on a special offer!

9. Loyalty schemes

Loyalty schemes give people a reason to shop with you over time – and they’re also great for increasing average spend.

For example, you might offer customers the chance to earn points when they order, or provide member-only discounts when they meet a certain order value threshold.

Rewards or loyalty programs work especially well for stores that sell consumable products where customers typically repurchase often, but they can also be useful for other stores, too.

10. Live chat

Adding a live chat feature to your store allows customers to quickly and easily get their questions answered, meaning they’ll be more likely to hit that ‘buy’ button and gain confidence in your business.

You can even use live chat to present upsell or cross-sell offers, thereby helping further increase average spend.

Want to learn more about how to increase average order value and maximise the profitability of your store? Get in touch with our expert team today.