You need to be raising your average order value.
It’s no secret that making more revenue from each and every order that your store gets is the difference between whether you lose money or profit.
If you’re only selling one product for every order you get, then your store will struggle (unless you have huge margins). The fact is, paid ads are only going to get more competitive.
Facebook’s CPM is continually creeping up as more advertisers compete for the newsfeed.
Because of this, you must squeeze as much profit as you can from every customer that buys to get a decent ROI on your ad spend.
Quick scenario: Let’s say your Average Order Value (AOV) is currently $25 and your ad cost per purchase is $7. That leaves you with $18 to cover the cost of goods and contribution to overhead. Pretty tight, right?
So what if you could push your AOV to $40 but your cost per purchase was still $7, do you think this would not only make you more profitable but also make your business more robust? Exactly.
The truth is, if you don’t do everything you can to extract more profit-per-visitor then your business will eventually stall. So here are 7 ways to maximize your AOV…
1. Pre-Purchase Cross-Sell Apps (Use with caution)
Although pre-purchase cross-sell apps like Bundle Products may increase your AOV, your overall conversion rate may suffer.
This is because these apps create friction for your visitors because they stand between adding the item they originally wanted and viewing the cart/checkout.
What’s worse is if these pop-ups aren’t set up correctly and your visitors are being offered totally irrelevant products.
This causes irritation and your sales will suffer.
Not only that, but these apps can significantly increase your page load speed resulting in a higher bounce or abandonment rate.
My advice is to test these types of apps and make sure that the increase in AOV is not offset by a dip in conversion rate.
2. In-Cart Cross-Sell Apps
Although these are technically still pre-purchase, but more subtle than “in-your-face” cross-sell pop-ups on product pages, in-cart cross-sells are a great way to boost your AOV.
My favorite app for this is Limespot, its algorithm makes intelligent product recommendations so your customers won’t be bombarded with irrelevant product suggestions.
And the best part is that they waive the subscription fee unless the app drives more than 5x the subscription cost.
This is great if you’re just starting with Shopify.
Offering a bundle that can easily be added to the cart is a surefire way to bolster your AOV.
But the trick is to make sure the items you offer go together like “peas and carrots.” And just like with cross-sell pop-ups, getting the combo wrong kills your store’s credibility in the shopper’s eyes.
The best app I’ve found for this is Upsell Bundles. It lets you easily create bundles without coding or having to create annoying duplicate variants like some other apps.
Quick Hack: Find your product on Amazon (or a similar one) and see what they show as “Frequently Bought Together.” This tells you exactly what works well as a bundle offer.
But there is something else here, you don’t have to offer a discount to upsell shoppers into buying a bundle.
Amazon doesn’t, they rely on sheer convenience as the motivation and the fact that their machine learning is so good that they always bundle highly complementary items that make complete sense.
4. Volume Discounting
Offering a tiered discount to encourage customers to buy multiples of an item is a time-tested trick in retail. People love getting a deal.
Having tested a few, Discounted Pricing by Booster Apps is the best I’ve found. You simply decide how many discount tiers you want to offer and at what level.
I recommend doing it at the product level to keep it simple.
Here’s what it looks like on a product page:
Conversion Hack: Add social-proof near the discount tiers showing how may people buy two or more. If they miss it on the product page, the customer is offered the discount again on the cart page.
Plus, if they already selected multiple items, they’re offered the next discount tier instead.
5. Free Shipping Threshold
I talked about how powerful free shipping is here, and setting a threshold plays right into increasing your AOV with bundling, volume discounts and cross-selling.
Think about it, if someone is motivated by free shipping, they’ll often spend a little more just to qualify. Hextom’s Free Shipping Bar works great for this, and it’s free for this basic functionality:
Combining these simple threshold notifications with easy ways to spend more through cross-sells, bundling and discounting supercharges your AOV…
6. General Cross-Sells
Let’s not forget the more passive cross-selling opportunities on the product and cart pages… Again, Limespot and also Cross-sell app are great for this.
They’re not as whizz-bang as what the other apps I’ve mentioned do but they play an important role in showing highly relevant related products below or beside the main product on your product pages and also just above the footer on the cart page.
7. One-Click Upsells
One-click upsells (OCU’s) are your secret weapon for really pushing the envelope on your average order value. The reason for this is because they’re post-checkout.
This means that there’s zero risk of blowing the sale like with pre-checkout cross-sells and upsells. Think about it, the customer has already taken a leap of faith and spent money with you, so there’s no better time to make an additional offer than when someone has just purchased and they’re experiencing a dopamine high.
Some of the smartest e-commerce store owners in the world know this and that’s why they bolt these upsells on to winning products whenever possible.
With apps like Funnel Buildr, all the customer has to do is click “yes” to your offer and it’s added to their purchase. They don’t need to enter their card details again, making it totally effortless for the shopper.
(If you’re using Paypal, you’ll need to contact them to enable reference transactions on your account so customers don’t have to go through the Paypal checkout again.)
Average Order Value Conclusion
If you’re serious about your e-commerce business, then you need to focus on increasing your Shopify store’s average order value.
Without it, you won’t be able to compete in the paid traffic arena.
Don’t just sit there thinking that all this is a good idea, go test these apps right now!