Posted in Retail & Ecommerce

5 Proven Ways to Increase eCommerce Revenue and Average Order Value

Most of us are just content to be making sales. But how often do we pause and consider if we’re making enough from those sales? The million dollar question is, could you be making more?
Average order value (AOV) is one of the few metrics that many ecommerce store owners don’t pay enough attention to.

Most of us are just content to be making sales. But how often do we pause and consider if we’re making enough from those sales? The million dollar question is, could you be making more?

The answer? Absolutely!

By paying close attention to your average order value, you can see huge increases in your store’s total revenue.

In this article, we’ll cover some of the ways that you can increase your average order value and, by extension, increase ecommerce sales and revenue overall.

But first, what is average order value?

Average Order Value (AOV)

Average order value is the metric used to measure the average amount that is spent on each transaction that’s processed through your website. 

AOV is an important metric for ecommerce businesses because it can be used to measure overall revenue growth and identify opportunities for increasing sales. So if the average customer at your ecommerce store spends $17.99, then that’s your AOV. Once you’re familiar with this number, your goal should be to figure out ways to incentivize the average customer to buy more.

Essentially, all tactics to increase average order value are marketing tools. They’re used to offer customers something in return for their purchase – either real or intangible – or give the impression of a great deal or perceived scarcity.​

Here are five of the ways that you can increase average order value:
​Offer free shippingUse scarcity tacticsProvide customer incentivesUpsell and cross-sellCreate a strong brand presence
​Let’s review each of them in more detail.

1. Offer Free Shipping

The average order value of a customer increases when free shipping is offered because it reduces the perceived cost of the product. Free shipping also creates a sense of urgency and encourages customers to purchase items sooner rather than later. Plus, free shipping is always a popular perk that can help you stand out from the competition.

According to research, 48% of shoppers will add more to their carts just to qualify for free shipping

2. Create a Sense of Scarcity and Urgency

Scarcity tactics include things like offering a limited number of products or running a flash sale and can increase the average order value for your ecommerce store. This is because customers are more likely to purchase an item if they feel like they need to act fast.

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Creating a sense of urgency is a great way to increase your average order value. This can be done by running limited-time sales or by offering exclusive deals to customers who purchase sooner.

Urgency is maximized when you create arbitrary deadlines and hold to them. For example, a flash sale of 20% off your entire store that ends at midnight EST might light a fire under a shopper who was considering making a purchase on your website. And the discount might incentivize him or her to purchase more, thereby increasing your average order value.
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However, it’s important to be tactful about when and how often you create urgency. Companies that overuse this marketing tool won’t be taken seriously after a very short time.

3. Provide Customer Incentives

​Another way to increase average order value is by providing customer incentives. Popular incentives include discounts or coupons, which encourage customers to spend more money in your store. Not only will this boost your bottom line, but it can also increase brand loyalty among your customers, especially if that incentive is post-purchase and encourages them to purchase again to receive the exclusive discount. 

4. Upsell and Cross-Sell Products

Upselling and cross-selling are two effective ways to increase your average order value. 

Upselling means offering more goods or services for a marginally higher price. Doing so entices customers to spend more money than they would have otherwise. A very simple example of this is the concept of “Supersizing” a meal at McDonald’s. Although the fast food giant has since discontinued the Supersize menu, McDonald’s made huge increases in revenue by encouraging customers to buy more using this clever upsell. 
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Cross-selling is a little different, but has the same result. By recommending related products, you can encourage customers to add more items to their carts and boost your sales.

5. Build a Strong Brand Presence

Building a strong brand can help you increase your average order value and, as a result, your overall revenue.
Think about it this way: If people are familiar with your brand and they trust you, they’re more likely to spend more money with you than if they were simply making purchases from an unknown entity.

So, how do you go about building a strong brand presence for your ecommerce store? 

Here are a few tips:
​Think about things like brand voice, defined as the language, word choices, and tone that companies use to communicate with their audience.Make sure your website is professional and up-to-date.Become active on social media: A large majority of consumers report that they feel more connected with a company when its CEO is active on social media.​​Create valuable (and consistent) content: What is your company putting out into the digital world in terms of content? Consider starting a blog, if you haven’t already.

Michael Arnold

Michael is a freelancer from New York City. When he isn’t writing about how Kliken unleashes the marketing, you can find him reading, writing for pleasure, or traveling the globe.

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