When the number of customers visiting your site declines, it’s a welcome sight to see the average order value (AOV) increase. It can make or break a business during a downturn in the market.
But how do you increase the AOV without sacrificing customer experience?
Upselling and Improving Customer Experience
In simple terms, “upselling” is a sales tactic to encourage customers to spend more money on a product to complement the initial purchase. The average amount each customer spends when they make an order boosts revenue growth even when there are fewer sales. It’s good for business but the consumer also benefits with bargain add-ons and extra benefits. For example, highlighting free shipping to customers if they increase the order value and complete the checkout helps boost AOV.
How does it work?
First, it’s important to recognise that it’s not meant to force customers to spend more or distract them from their existing shopping cart. Ultimately, your goal is to complement a purchase during the buyer’s journey. Examples include:
- Upsell: This sales technique recommends upgrades to an increased product quantity or size. It could include a larger quantity of a facial cream for example.
- Add-ons: Your website automatically recommends extra services that complement the purchase, such as gift packaging or a protection plan. This is effective when selling hardware such as the iPhone, where insurance is offered.
- Bundle sale: Products that specifically complement each other and are easy to add to the cart from the product page or checkout. Bundle offers are also commonly known as “frequently bought together” or “other people also bought”. This is quite effective in cosmetics (e.g. a cleanser and moisturiser), sports apparel and other similar products.
- Cross-sale: This can be effective when your eCommerce store offers multiple but related categories. Your online store will offer different categories to increase the initial shopping cart value. It’s often used to get customers to qualify for a free delivery or special discount offers. Apple executes this particularly well when selling their products or products that require batteries.
Consider Checkout Conversion Rate
The checkout conversion rate is the ratio of consumers who start the checkout process and complete it with a successful purchase. You can measure and compare your checkout conversion rates based on a particular period of time, such as weekly, monthly, quarterly or campaign-based timescales. Baymard Institute tracked the global average cart abandonment rate for 12 years, and discovered the average rate is 69.8%.
If you plan to implement a campaign to boost the average order value, it’s a good idea to benchmark your checkout conversion rate before launching your campaign, so you can measure the impact on your store. According to Beymard, the top reasons for abandoning cart are:
- 47% said “Extra costs are too high (shipping, tax, fees)”.
- 25% said “The site wanted me to create an account”.
- 24% said “Delivery was too slow”.
- 19% said “I didn’t trust the site with my credit card information”.
- 18% said “Too long / complicated checkout process”.
- 17% said “I couldn’t see / calculate total order cost up-front”.
- 16% said “Returns policy wasn’t satisfactory”.
$738 billion
In addition, Baymard found that: “If we look at the combined eCommerce sales of $738 billion in the US and EU, the potential for a 35.26% increase in conversion rate translates to $260 billion worth of lost orders which are recoverable solely through a better checkout flow and design.” The only way to be certain of which revenue boosting strategy will result in the most profit for your business is to test it and have your key metrics identified in advance.
The Savvy Consumer
It’s important to remember that consumers are savvy and can spot a marketing or sales ploy a mile away. However, when it benefits them personally, they will open their wallet (so to speak). It all comes down to value. Helping the consumer get exactly what they want without compromise and ensuring they feel good about it not only increases the average order value, but it also makes them happier in the long run and turns a once off purchase into a returning (and happy) customer.
By offering personalised experiences, relevant recommendations, and products that truly are worth spending a little extra on will ensure success for your eCommerce business and the happiness of your customer.
Focus on the Customer
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