For ecommerce businesses, the Average Order Value (AOV) serves as a vital metric of significance. It tells you how much each customer spends when they buy from you and can help you better understand the profitability of your business. If you want to increase AOV, it’s important to understand what AOV is and how you can increase it. In this article, we’ll cover everything from calculating your own AOV to implementing pricing strategies that will help boost it even further:
What Is Average Order Value?
The Average Order Value (AOV) represents the mean expenditure per individual order. In other words, it’s the total revenue generated by all orders divided by the number of orders placed.
AOV can be used as a metric to measure customer loyalty and satisfaction because it shows how much each customer spends on average. If you want to increase your AOV, you need to focus on improving customer retention rates and reducing cart abandonment rates–but first, let’s take a look at some ways that businesses have increased their AOVs in recent years:
How to Increase Average Order Value
- Increase the number of products
- Offer a discount
- Create a loyalty program
- Offer a bundle (e.g., 2 for 1) or free gift with purchase
How to Tell if Your AOV is Good or Bad
Before you can increase your AOV, it’s important to know what an average order value looks like. Here are some examples:
- If your business is selling products on Amazon or eBay, the average order value will be around $100. This is because most products sold through these sites are relatively expensive and require buyers to spend more than $100 before they’re eligible for free shipping (which means that even if only one item costs $100, customers will still have to add another item).
- If your business sells low-cost items such as clothing or accessories online–or even at brick-and-mortar stores–your average order value may be closer to $20-$30 per sale. This is because these kinds of items tend not only cost less but also don’t need any additional accessories like batteries or chargers in order for them work properly; therefore, shoppers don’t feel like they need so many extras when making a purchase decision!
5 Pricing Strategies for Increasing Average Order Value
- Offer a Discount
Offering a discount is one of the most effective ways to increase average order value. You can offer discounts in various ways:
- Percentage off – Give your customers up to 20% off their purchase by entering the code “SAVE20”. They’ll get excited about the savings and may be more likely to make another purchase later on, increasing their lifetime value as well as average order values overall.
- Coupon code – A coupon code is an offer that gives customers who use it during checkout (or sometimes before) instant savings on their purchase. For example, if you run an online store selling shoes and have just released new styles for summer, create a coupon for 10% off any pair of sandals or flip flops purchased through June 30th using “SANDALS10OFF”. This helps drive sales now while also encouraging repeat business from those who enjoy saving money!
In conclusion, it is important to note that there are many ways to increase your AOV. While some of these strategies may be more effective than others, we believe that they all have their place in a successful ecommerce business. The key is finding what works best for your company and implementing it consistently over time so that customers come back again and again.