Every business wants customers to keep coming back to spend on their E-Commerce store and the more customers buy the more money you make. To get customers to spend more online you need to understand the average order value. Average order value tracks the average amount spent each time a customer places an order on a website and mobile app. To calculate your business average order value you divide total revenue by the number of orders. This is the simple way to calculate average order value, but don’t forget to subtract all expenses and cost of goods sold to get an accurate value. Knowing your current average order value is vital to setting goals and to plan how you can improve. Here are 5 tips to increase average order value:
1. Free shipping threshold
Shipping costs are one of the major reasons shoppers abandon their cart during checkout and offering free shipping helps to stop shoppers from abandoning their cart. You can motivate customers to spend a little more in order to receive free shipping by setting the threshold at a reasonable price, if you make it too high you will drive your customers away. You should display a message before the checkout informing the customer how much they would need to spend to get free shipping as this provides a smoother journey without any surprises.
2. Start cross-selling and upselling
Cross-selling and upselling are two of the most effective methods for increasing spending and if used wisely and effectively it can motivate customers to spend more. Cross-selling offers customers an option of additional items that they might not think about and these products are recommend based on what they have in their cart. For example if a customer is buying lipstick you might offer foundation. Upselling helps to encourage customers to increase what they are spending by upgrading to a better product. You can recommend a better product based on better features, usage or graphics just to name a few. For both of these methods to work always ensure that your recommendations should be relevant to the initial products and offer reasonable deals.
3. Give limited product offers
Sometimes customers can’t decide whether to purchase a particular product but you can lure them with limited product offers. Limited product offers create a sense of urgency among customers and encourages them to buy during the limited timescale. You can decide what time period you can run the offers and how much percentage off you are giving. It is important to promote this offer correctly to motivate customers for example you can say “Get 20% off on all products for the next 4 days” this will make the customer act right away to purchase the products.
4. Purchase incentives
You always need to take good care of your customers and eventually in turn they will return the favour. Purchase incentives can get your customers purchasing more per visit and more often. You should make efforts to reward your customers with purchase incentives that they can redeem online. You can use a variety of incentives such as coupons, loyalty card and gift vouchers to use for their next purchase off a minimum order value. This will help increase your average order value and also the online sales. However too much discounting too often will cause customers to expect it and never buy at full price so limit how often you offer these incentives. You want your customers to love you for what you sell and not because you keep offering discounts.
5. Social sharing
Social media is more than just your website and you need to be able to interact with your customers on various platforms. You can use social sharing on your website to encourage customers to share your website content i.e products or blogs on their other social media platforms. This allows your brand to be seen by potential customers who might prefer shopping from another platform i.e Facebook. You can ask customers to add their reviews of the products they have used and this can be highlighted for other potential customers to see. You need to build trust amongst your customers and one way is by seeing proof of past reviews and purchases. The more shares you get the more customers you reach and attract to your business.
Hi, I’m Pam
I am an E-Commerce Specialist with over 13 years retail management and sales experience. Driven by my passion to helping people, I created the Retail P Factor to provide effective and actionable strategies for women in retail and sales.
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I would love to hear your feedback on what you think of these tips.