How to Improve Average Order Value? 10 Effective Tips

how to improve average order value blog post title with illustration related to e-commerce

Are you happy with the number of your customers but not with the level of your income?

Let me tell you an obvious secret: Increasing the number of customers isn't the only strategy to increase income from your online store. However, improving your average order value is one of the most effective strategies to boost your income.

We all know that more traffic typically leads to increased revenue through more customers or orders. This is why companies enthusiastically engage in SEO and other marketing tactics.

However, simply having visitors is not always enough. You must make every effort to ensure they 'purchase' as much as possible.

There are several ways to improve the average order value. In this article, I'll show you some simple and effective strategies you can implement today!

What Is the Average Order Value?

Average order value (AOV) is the metric merchants use to better understand their consumers' shopping habits. It is the average amount of each transaction from purchases made on your online store.

Knowing your company's average order value allows you to assess your pricing strategy and online marketing activities by giving the information required to estimate individual customers' long-term worth.

How to Calculate Average Order Value?

The average order value is calculated by dividing the total monthly income by the number of orders placed in that month. You can calculate your AOV for any time period you wish.

Let's say you have an online clothing store with total revenue of $5000, and the revenue comes from a total of 250 orders. So, your average order value will be: 5000/250=$20

the equation for calculating average order value showing AOV equals revenue divided by number of orders

When calculating AOV, sales per order are taken into account rather than sales per customer. Regardless of the number of purchases of a customer, each transaction is counted separately.

How to Improve Average Order Value of Your E-Commerce

To improve average order value, you must consider the following simple yet practical steps:

1. Use Exit-Intent Popups

An exit-intent popup is a popup that appears when the user is about to leave your site. It's a last-ditch effort to get the user to stay and make a purchase. And it works.

an exit intent popup offering discount with two laptop images

How is this going to work? Simple.

Customers may quit your site if it does not provide free delivery or if the prices are too high. By offering visitors the opportunity to receive a discount or free delivery using exit-intent popups, you may entice them to stay on your site and make a purchase, ultimately spending more than they meant.

The key is being creative when it comes to exit-intent popups.

There are a lot of different ways to create an exit-intent popup, but here are a few tips:

  • Make sure the popup is relevant to the page it's appearing on.
  • Make the offer irresistible.
  • Make sure the popup is easy to read and navigate.
  • Include a strong call to action.
  • Test different variations to see what works best for your site.

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2. Offer "Free Shipping" and Other Freebies

Many customers are lured by the offer of free shipping.

Including free shipping as an incentive can help you increase your average order value.

According to BigCommerce's Shipping Through Shifting Expectations report of 3,000 consumers, it is seen that 84% have specifically made a purchase because shipping was free, and 30% said they always increase the size of their orders if it qualifies them for free shipping.

a screenshot of Burger King offering one dollar delivery fee with burgers, drink and fries images

Similar to free shipping, here you can see fast-food chain giant Burger King offering a $1 delivery fee to appeal to customers to make or complete their order.

But it's not the only way. You can also increase your average order value by including freebies with each purchase.

Freebies can be anything from a small gift to a discount on a future purchase. They're a great way to show your customers that you appreciate their purchase and that you want them to come back for more.

a screenshot of MAC cosmetics campaign offering discount and make up kit featuring product and a woman images

In the example above, you can see the famous make-up brand Mac offering a glow-up gift as a part of their marketing strategy. They also included product visuals, a CTA button, and a popping background color to make sure their offer is eye-catching and calls to action.

3. Bundle Products or Create Packages

When a business mixes popular goods sold individually into a boxed set with a discounted price, this is known as mixed product bundling. Customers can buy one or two goods separately, or they can buy many products grouped together.

This is a great way for improving the average order value, as customers are more likely to purchase multiple items when they're all grouped together.

One way to bundle products is to put them into packages. This could be a skincare package that includes a cleanser, serum, and moisturizer, for example. Or it could be a package of clothing that includes a top, bottom, and accessory.

a popup including a woman holding a pot of cream offering a moisturizer bundle

Packages are an easy way to get your customers to buy more and can be a great way to move slow-selling items. Plus, it makes your store seem like a one-stop shop for all of their needs!

You can also offer package deals or discounts for customers who purchase a certain number of items. This will encourage customers to buy more and ultimately boost your average order value.

4. Offer Limited-Time Special Promotions

One of the simplest answers to the question "how improve your average order value" is running limited-time promotions.

This could be anything from a sale to a giveaway or even a new product launch. Take advantage of the FOMO (Fear of Missing Out) marketing. Trigger potential customers to take quick action by offering limited-time promotions.

Timing is key when it comes to promotions. You want to make sure that you're promoting your products at the right time and in the right way.

an example of FOMO popup by Popupsmart including black balloons offering a limited time discount

For example, a giveaway might work well around a holiday like Thanksgiving or Christmas, while a sale might be better timed around the end of the season. Or it could be just a free shipping discount that could be used till the end of the day.

Think about what's going on in your industry and what would work best for your business. Strategize and plan ahead, and you'll be sure to see results.

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5. Upsell or Cross-Sell Complementary Products

If a customer is already spending money on your site, you want to make sure they're seeing all the other options complimenting the product that they are purchasing.

One of the most profitable strategies is to sell to your present client base. There are several studies that show this is one of the greatest methods for businesses to make money.

That's why upselling and cross-selling will likely become more important to drive efficient and long-term success and improve average order value.

You can do this in a few ways. One is by suggesting related items on the checkout page.

Another is by including product recommendations on your product pages. And lastly, you can also send out automated emails that offer customers additional products based on what they've already bought.

a popup aims to improve average order value by offering complimentary products including a scarf and a bag

For example, on an e-commerce site for women's clothing, you might suggest a pair of shoes or a purse go with the dress or shirt they're viewing. Or, on an e-commerce site for home furnishings, you might suggest a lamp or rug go with the couch or bed they're viewing.

6. Start a Customer Loyalty Program

A great way for improving your average order value is to set up a customer loyalty program.

Because the average consumer spends less than a minute on a website, it is doubtful that they will view the majority of a merchant's market offering and prospective purchases, which means a significant possibility for further sales is lost.

The good news is customers who are pleased and satisfied continue to buy from you, spend more than others, spend more money on each transaction, are less volatile, and are more likely to become brand supporters.

New consumers are more expensive to acquire and spend less money than loyal, repeat customers. It is vital for a company's success to keep consumers coming back for more.

a customer loyalty discount code popup example with a woman shopping illustration

Above, you can see a popup example offering loyal customers discount codes.

Customers who are loyal to a certain company's products are not impacted by price or availability. They would rather wait – and perhaps pay more – for the same level of service and product they are accustomed to and value.

There are a few different ways you can set up a loyalty program.

You can either give customers points for every purchase that they make or offer discounts and freebies for customers who reach a certain spending threshold. This will give your customers incentives to keep spending more and more with you.

Whichever system you choose, make sure you let your customers know about your loyalty program, make it easy for them to join, and the benefits are enticing enough to encourage your customers to keep spending with you.

This will encourage them to stick with you. The more they spend, the more rewards they get!

7. Have a Full Functioning Live Chat Support

live chat statistics image with a man throwing money around illustration

If you have seen Popupsmart's blog post about live-chat statistics, you know that offering live-chat increases conversions and, ultimately, revenue.

79% of businesses say offering live chat has positively affected sales, revenue, and customer loyalty. So it is evident that live chat has a direct positive effect on improving average order value.

Consumers are likely to remain loyal to a company that offers live chat support and buys again from a company that offers live chat support. It's one of the fastest and easiest ways to provide customer service. It allows customers to ask questions and get help with their orders in real-time.

Create a Free Live Chat Box with FreeChat

8. Build Trust

When people are buying from a store for the first time, they tend to be reluctant to spend a lot of money.

There are various strategies for converting newcomers into repeat customers. Focus on personalization, email marketing, and retargeting.

You can use popups that will only be visible for first-time customers offering a discount, free shipping, or coupon codes with a minimum purchase limit so that they will be more motivated to buy more.

Popupsmart welcome popup example for newcomers offering exclusive content for subscribers

Using testimonials is also an effective way to build trust with any visitor. See Packlane's example below. They included a testimonial video to show how to succeed with their custom packaging products.

a screenshot of Packlane's website showing a testimonial video with a man and a woman featuring

BaseCamp also has a long list of testimonials. Understanding this concept well, BaseCamp, a SaaS tool helping businesses manage teams and tasks, spotlights some of their most well-known users' testimonials on their landing page.

9. Trial Periods and Simple Return Policy

Return policies are the regulations that a shop establishes to govern how consumers return and exchange undesired products.

A return policy informs customers about what things may be returned and why, as well as the duration during which returns are allowed.

In relation to building trust, when customers open your website or app, they want to see a clear return and refund policy that outlines your store's rules.

People often dislike shopping in stores when they are unsure whether the return and refund process will satisfy their expectations.

According to Accenture's Invesment Advice Report, 55% of consumers want a low-cost return shipping option.

Return policy statistics with e-commerce related illustration and popupsmart logo

In the same study, it is stated that return policy ultimately influences 80% of the sale. Customers will feel more secure if your return policies are clearly presented, and they will be more inclined to trust your company.

Similarly, generous trial periods demonstrate your trust in the product's quality. And this assurance is passed on to the buyer.

IKEA, for example, offers a 90 days trial for their mattresses. If the buyer is not happy with its performance, they can go back and simply choose another one. When they know that they can easily return the product, they tend to buy more which consequently increases your AOV.

10. Make the Most Out of Social Media

Everyone is very involved with social media. And a large chunk of this traffic prefers to purchase things after reading evaluations in the social arena and observing real-world use. In fact, many clients will only purchase a product from your company after reading an internet review.

Sharing client feedback on your company's dedicated social channel is a solid tactic here. You may solicit product reviews from social influencers.

Today, image-driven social media photography may help your company rise. You can also utilize the power of user-generated content (UGC) in emails by including reviews and social media postings from real people who have used your products.

Social media provides you with user-generated content. UGC provides social proof by demonstrating what actual people enjoy and buy, as well as how items appear in the actual life.

Customers are more likely to buy when they can see images and videos of your brand in action.

These tactics can simply assist in improving the AOV.

Before You Leave...

Now that you know the ways for improving your average order value, it's time to put these tips into action and start seeing results!

Don't try all methods to improve your average order value in one go. Instead, try each option and determine which one is most effective for you, then stick to what works.

Keep in mind that it may take a bit of time for your efforts to start paying off, but as long as you stay focused and motivated, you should be able to improve your average order value in no time.

And who knows? Once you've boosted your average order value, you may even be able to start scaling up your business and take it to the next level.

Frequently Asked Questions

Why Is Average Order Value Important?

Average order value provides information on the customer's purchasing habits, online advertising budget, and even product price. When you improve the average order value, you directly increase your profitability and revenue growth.

What Is a Good AOV?

Your average order value varies depending on the product and industry.

Naturally, your AOV will be higher if you sell things like luxury cars, costly jewelry, furniture, etc.

If you offer things such as books or pens, your AOV will be lower since the items you sell are less expensive. A good AOV is often a greater average order value than competitors in your niche.

Is the Average Order Value Inclusive of Discounts?

Yes, client deductions/discounts and other relevant inputs have a direct influence on the overall average order value. Shortly, discounts have an effect on the overall average order value.

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