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The definitive guide to increasing Average Order Value on your Shopify store [2022 Guide]

increasing your average order value

Last Updated on by LAUNCHTIP

The definitive guide to increasing average order value on your Shopify store

Increasing your average order value means that you make more money from each sale on your Shopify store. In turn, this makes your business more profitable. When customers shop on your store, they normally only purchase what they were originally looking for. To get customers to buy more from your store, you’ll need to present them with relevant great products. This will generate more income from one sale and increase the average order value.

What is average order value?

Average order value (AOV) is the average monetary amount a customer spends when making an order on your store. Average order value is an important metric that is used to help grow your business. Let’s look at an example. If your store has revenue of $1000 and the number of orders is 50, your AOV is $20. This means that on average, customers spend $20 per order.

Benefits of increasing your average order value

The best thing about increasing your average order value; your revenue and profit will both increase too. Earning more per order means your business revenue increases. Increasing the average order value is always good, as it means you can reinvest money into growing your business further.

If you can increase your average order value, you can afford to spend more on acquiring a customer. Spending $10 on marketing when your AOV is $40 is not a great return after you deduct costs and taxes. The more you can get your AOV up, the more cost-effective and profitable your marketing becomes. When your AOV strategy proves to be working, spending more on marketing to gain further customers is achievable.

If you can get your customers to convert at a higher AOV on your store, their lifetime value (LTV) will also be higher. Therefore, this opens many re-marketing opportunities to them in the future.

How to increase your average order value

Once your average order value has increased to your perfect figure, you can spend more time on marketing to new and potential customers. The more customers you have purchasing on your store at your AOV, the more income your business receives.

There are numerous methods that can be used to raise your average order value. Let’s take a look at these below.

Increase prices

Increasing your product prices will immediately achieve a higher average order value. It’s a good idea to find out what the sweet spot is between the number of orders and price. If you increase your product prices by $10 but find the number of orders drop significantly, then try lowering the price gradually until you find the perfect spot where orders pick back up again.

It’s always a good idea to research your competitors and find out which price point is working for them. Don’t always copy them exactly, but take note of what their prices are and alter yours accordingly.

Cross-sell & upsell

Promoting relevant product on your product pages is a great way to get customers to purchase more. Cross-selling items and upselling are important methods of increasing your average order value. SellUp is a fantastic app that allows you to do just this. Simply create on-page upsells to customers. These can sit just below the Add to cart button on each product page.

It’s good practice to show relevant products for the on-page upsell that are relevant to the main product the customer is viewing. For example, the customer might be viewing a hat. The on-page upsell for this product might be gloves that match the hat. If the customer goes on to purchase both products, the average order value for that particular order has increased.

SellUp also allows action upsells. These appear as a popup once a customer adds a product to their cart. For example, if the customer is purchasing a phone case, the action upsell popup might show a screen protector. A customer is likely to purchase both the phone case and screen protector for added protection. Again, it’s an easy way to boost your AOV.

average order value

Bundle products

Creating bundles is a great and easy way to raise your average order value. If you bundle popular products together, this will incentivise larger orders. Crate allows you to do just this. By creating engaging bundles, customers will feel the urge to purchase more. Bundles allow you to group relevant products together and persuade consumers to buy more.

By offering collections of your catalogs to customers, you can sell more. If you want to convince the customer further, try discounting the bundles to sell even more. People love to save money and if you can show them how much they are saving by buying a bundle, they will think they’re getting the deal of the century.

average order value

Reduce discounting

Whilst discounting can incentivise orders, it reduces your AOV. With a focus on retailing your products using unique selling points and offering a stellar service, you can achieve higher orders without the need to discount. Ping gives merchants the opportunity to display powerful onsite messaging to consumers. It’s important to capture those customers that are unsure about checking out on your store and get them to convert.

Showing you are a trustworthy brand is important to the majority of consumers. Simply display your review rating to give customers security or exhibit unique or important selling points. Any of these additions can help to retain customers for future purchases or increase their AOV.

average order value

Introduce a loyalty scheme

Loyalty schemes usually offer points to customers. You can award points based on basket value, frequency of purchases, referred customers and so on. All these factors help drive a higher AOV. Smile: Rewards & Loyalty can help achieve this. Easily boost your retention with referrals, points and exclusive offers. Give your customers a reason to checkout on your store.

Having a powerful loyalty and rewards scheme means that you can cut back on acquisition costs. Create social proof with word-of-mouth marketing and encourage customers to use their referral links to gain more points and money off future product purchases.

average order value

Offer warranty and insurance

Merchants take up these for peace of mind which increases orders. Offer in house (CPS Extended Warranty Upsell) or offload this to a provider (Mulberry Product Protection). CPS Extended Warranty Upsell allows you to starting selling warranties quickly and efficiently. If you can get your customers to purchase warranties with their products, you are increasing your average order value.

Using this app, it’s super simple to make the warranties available to customers. Once your products are mapped, the warranty offering is automatically applied to the correct product page in Shopify. The customer can then add the warranty along with the product to their cart.

average order value

Mulberry Product Protection allows merchants to embed extended warranty offers into their customer journey. Easily integrate through their custom ecommerce implementations. Finally launch your warranty program with several placement options, such as on product pages and in customer’s carts, as well as post-purchase pages and email campaigns. Offering warranties is another fantastic way to increase your average order value and also offer brand trust to your store.

average order value

Premium shipping services

Offering premium shipping services with expedited options is a great way to add more value to orders. Customers always choose these faster shipping options when they want to receive their items quicker and they are always willing to pay for the expedited service. Pirate Ship ensures you get the best shipping rates. No one wants to pay more than they have to.

Easily access commercial pricing for all types of services. Explain the benefits to your customers about why they should faster shipping in order to receive their items quicker. There is no longer a need to wait a week to receive an order.

Activate “tipping” at checkout

Give customers the opportunity to leave a tip. And why shouldn’t you? You and your team work super hard to ensure your customers receive their orders so why not ask for a tip at checkout. You can set it up in Shopify with one click. Online tipping gives your customers a chance to add a tip to their order on the payment page when they check out. The tip can be added as a percentage or by entering a custom amount.

average order value

Conclusion

The importance of increasing your average order value affects many things such as your business revenue and sales. Your average order value is subject to change if you bring in or remove products from your online store. A/B testing to find the sweet spot between orders and pricing is key, as products priced too high won’t get any sales. Price a product too low also and consumers are less likely to buy, as it’s seen ‘too cheap’. Finding the middle point is what you need to look for. Use your competitors to help gage where to price your products.

Having a higher AOV means you can spend more on marketing to acquire new customers. This is key to making your business successful. Having more customers means you can re-market to them, offering new and exciting products that will get their attention. By keeping your current customers keen, you’ll inevitably increase your lifetime value also.

Using upsells and bundles will help to raise your AOV. Upsell relevant products on your product pages to encourage customers to buy more. Create product bundles that customers cannot resist by showing the amount they can save. People love to save money so this a great way for them to do that, but also benefits you as the merchant.

Add trust badges to your website and important messaging that will encourage consumers to convert. Having a fantastic loyalty scheme will add to this too. Customers love to be able to collect points and earn money off products. The more they buy, the more points they receive. It’s a great incentive.

There are several methods that you as a merchant can use to increase your average order value. Calculating your AOV can really help you to understand how well your store is performing. After calculating your AOV, try some of these strategies above to increase it.

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