Every retailer powerhouse—online or brick-and-mortar—knows that it’s easier and more cost-effective to sell to a returning customer over a new customer.
For ecommerce companies, an average of 43% of revenue comes from returning customers.
Think about it – if a customer is already spending their time and money with you, that means they trust your brand and product. They like what you are doing. And the best time to get your customers to spend more money with you, it when they are actually spending money. That is why Average Order Value is a key metric for ecommerce stores.
If you’re serious about increasing the revenue for your ecommerce business, you need to focus on metrics that make a difference to your bottom line and the customer experience. Average Order Value is one of those.
Average Order Value, also called AOV, is the average amount of money customers are spending on your website. A high AOV increases overall revenue and improves the customer experience.
Focusing on AOV data helps you:
- Boost your overall revenue.
- Adjust your pricing strategies.
- Determine which product bundles are most successful.
- Manage your risk.
- Understand the cart experience.
How can you increase your AOV?
One of the easiest ways you can increase AOV is to offer an incentive.
For example, if you offer free delivery on all orders above a certain price, customers will want to spend money more on your site to qualify for free shipping.
Many top ecommerce companies do this. Jet.com offers free shipping for any purchase over $35.
Another simple way to boost AOV is to upsell. When a customer is looking at a $300 TV, show them further examples of a $350 TV, a $400 TV, etc. If you sell a popular product, what accessories do your customers need or want to go with it? Carrying cases? Covers? Batteries? It is maddening to get your new product, only to discover you need 3 more items to make it work. Help solve that issue for your customers by offering bundles or add-ons. Not only will this help make your customers experience better, it will increase your AOV.
To increase your knowledge on key ecommerce metrics, download and read our ebook: The Top 9 Metrics You Need to Grow Your Ecommerce Business.