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What is AOV? The 7-Step CRO Approach to Elevating Your Average Order Value

What is AOV? The 7-Step CRO Approach to Elevating Your Average Order Value

Last Updated:  
March 18, 2024

If you're seeing solid traffic growth and your conversion rates are soaring, congrats, you're crushing it! 

When aiming for revenue growth, most marketers instinctively focus on acquiring more customers.  While that's a valid approach, let’s not forget the unsung hero in unlocking revenue – Average Order Value.
Generally speaking, increasing AOV is more cost effective long term, and builds more brand equity…higher AOV means more items in cart, which means more items in people's homes, and more money in your cash flow.

In this articl, we’ll dig deep into the 7-step approach anyone can use to improve AOV with Conversion Rate Optimization (CRO).

What is Average Order Value (AOV)? 

It's simply defined as the average amount each customer spends on orders from your store. 

For example, if you earned $2,000 in total revenue and had 400 orders, your Average Order Value would be $2,000 ÷ 400 = $5. This means that, on average, each customer spends $5 per purchase.

Simple, right? But don't let its simplicity fool you—it's a powerhouse metric that can unlock incredible revenue potential. By focusing on increasing your AOV, you're essentially getting more value out of each customer without having to chase new ones. This presents a golden opportunity: every increase in AOV directly boosts your revenue. 

Now, let's dive into some Before & After UX design recommendations and actionable tips for increasing AOV through the lens of Brand-First Conversion Rate Optimization (CRO).

1️. Upselling and Cross-selling

A few ways to increase your AOV are methods like upselling and cross-selling. Upselling encourages customers to purchase a higher-end product or add-on, while cross-selling entices customers to buy related or complementary items. 

Actionable Tips:

  • Highlight the benefits of the upsell or cross-sell items and how they enhance the customer's initial purchase.
  • Make sure these items are relevant and helpful to the customer's needs.
  • Use clear and persuasive language in your upselling and cross-selling prompts.

In our work with Pretty Boy, we highlighted an additional shopping option by recommending an Exclusive Rope Hat to complement their purchase. We made sure to provide clear product details like images, titles, descriptions, prices, and color options - all presented in a straightforward manner. It’s also important to clearly communicate an additional perk of getting the additional product – like unlocking free shipping!

2️. Bundle Products

Creating product bundles is a fantastic way to increase AOV. Customers perceive bundles as offering more value, leading them to spend more. A tool like Triple Whale’s Insights can help you determine which products are most successful, and which bundles would drive more sales.

Actionable Tips:

  • Bundle products together that make sense. For example, if someone is purchasing face wash, offer a bundle with a toner or moisturizer to complete the skin care routine.
  • Offer a small discount on the bundle compared to buying items separately to incentivize purchases.
  • Promote bundles prominently on your website and in your marketing campaigns.

The ‘Buy Box’ (where the Add-to-Cart (ATC) button is on the product page) is an ideal space to introduce customers to your available product bundles. In our strategy for Glass Guard, we recommended adding a "Most Popular" badge to guide users towards those choices. We also experimented with removing the quantity selector from the main page, reserving it for the cart and checkout process. By enlarging the Add-to-Cart (ATC) button to span the full width and arranging the secondary payment option below it, we addressed potential concerns users might have while making a purchase. Additionally, incorporating incentives like free shipping offers and Estimated Time of Arrival (ETA) details can further boost the chances of users proceeding to checkout.

3️. Offer Free Shipping Threshold

A tried-and-true strategy for increasing AOV is to offer free shipping—but only if the order value exceeds a certain amount. Customers traditionally enjoy spending more money on products than paying for shipping (thanks, Amazon). 

Actionable Tips:

  • Set a free shipping threshold that is slightly higher than your current AOV. This will encourage customers to add more items to their order.
  • Promote your free shipping offer in your website header, on product pages, and during the checkout process.

To make the most of a free shipping promotion, be sure to provide your audience with a clear next step. After grabbing their attention with an announcement bar, direct them to your products with a 'Shop Now' link. This is exactly what we did for Climb On's homepage. To further encourage purchases, we also positioned the free shipping offer right below the call-to-action (CTA) button, which helps to remove any buying hesitations.

Another smart move is to utilize unused space in your product catalog by adding a Free Shipping card, like what we did with Thomson Carter’s. This strategic placement not only highlights the free shipping offer but also includes "30 Day Free Returns" information, simplifying the decision-making process for customers.

4️. Volume Discounts

Offering a discount for buying in bulk can significantly increase your AOV. Customers are incentivized to buy more of a product to save money based on perceived value.

Actionable Tips:

  • Offer tiered discounts based on the quantity purchased.
  • Make sure the discounts are substantial enough to motivate customers to buy in larger quantities.
  • Promote your volume discounts on product pages and in your marketing campaigns.

Taking inspiration from our work with Human Improvement, incorporating volume discounts directly into the Buy Box can give your AOV a significant boost. Start by improving the accessibility and visibility of the quantity selector, making it effortless for customers to choose quantities and explore bundle options. Emphasize the potential savings they can enjoy when opting for these bundles or larger quantities. Additionally, consider implementing a tiered 'Subscribe & Save' feature, offering greater discounts for longer subscriptions or larger orders. This strengthens the value proposition and encourages upselling in a compelling way.

5️. Limited-Time Offers

Scarcity and urgency can drive customers to purchase more. Limited-time offers create a sense of necessity that can lead to increased order sizes.

Actionable Tips:

  • Create flash sales or limited-time discounts on your products.
  • Use countdown timers on your website to increase the sense of urgency.
  • Communicate the limited availability of the offer through your marketing channels.

To create a sense of urgency that drives customers to make larger purchases, follow the footsteps of ilovehue's sitewide sale and implement limited-time offers. Strategically position these enticing deals, such as in the announcement bar, to captivate immediate attention. By highlighting their exclusivity and fleeting nature, you create a compelling sense of urgency that pushes users to take immediate action and seize the opportunity before it disappears.

6️. Personalized Recommendations

Personalizing the shopping experience can lead to larger order sizes. By offering recommendations based on past purchases or browsing behavior, customers are more likely to add additional items to their carts.

Actionable Tips:

  • Implement a system that offers personalized product recommendations.
  • Use customer data to suggest products they may be interested in based on their previous purchases and browsing behavior.
  • Showcase these recommendations prominently on product pages and during the checkout process.

Consider adding a 'Recommended For You' section, similar to what we introduced for Ikkari. Display product cards in a simplified 2x2 grid, making it easier for customers to compare products. If the product titles are already self-explanatory, try eliminating the need for product descriptions, freeing up valuable space for a review badge on each product card to enhance trust and credibility.

To guide customers overwhelmed by numerous choices, test adding a 'Best Sellers' or a ‘Customers Also Liked’ section. Remove distractions like the wishlist, quick view, and 'add to cart' button, and instead direct users to the product detail page (PDP) first for a deeper understanding of the product. This strategy can reduce cart abandonment rates. 

7️. Post-Purchase Upsells

After a customer completes a purchase, it's a good opportunity to present them with additional offers. This strategy, known as post-purchase upselling, can push your AOV higher!

Actionable Tips:

  • Install an upsell app on your Shopify store that supports post-purchase upselling.
  • Analyze your product catalog and identify complementary or related products that you can upsell to customers. For example, if someone purchases a camera, you can offer additional lenses or camera accessories as upsells after the checkout process.
  • Craft compelling upsell offers that provide value and entice customers to make additional purchases. Highlight the benefits of the upsell product and consider offering discounts or exclusive bundles.
  • Determine the trigger points at which the upsell offer will be presented to customers. These trigger points can include order confirmation pages, thank-you pages, or email receipts.
  • Create upsell funnels that allow customers to easily add the upsell product to their order with a single click. Streamline the process by pre-selecting the upsell item and automatically applying any relevant discounts.

AOV doesn't just play a big role in your business, it's THE backbone. This magic metric lets you generate more revenue from existing customers, meaning you can grow your business without throwing heaps of money at marketing and advertising.

Let's break down why AOV deserves a spot on your priority list:

  1. It gives you a window into customer behavior, allows you to understand their purchasing habits, and develop strategies to make each sale more profitable.
  2. It gives you a benchmark to measure your customer acquisition cost against. Ideally, the AOV should be considerably higher than your acquisition cost.
  3. It directly affects your bottom line. A higher AOV means more revenue without having to increase spend on customer service, delivery, or conversion.

As you navigate the exciting yet challenging terrains of DTC and eCommerce, remember that strategies evolve, but some tools like AOV remain timeless. We're here to support you on your journey. At Oddit, we offer UX teardowns and actionable insights to help you optimize your customer journey and drive conversions.

Ready for a taste of Oddit magic? Get A Free Quick Win for your website. Choose a page on your site, and our squad will redesign a key section, optimize it for conversions, and walk you through the changes—all for zero cost. It's time to make your site work smarter.

Meet Oddit: Your Go-To For UX Teardowns

Oddit is all about injecting that freshness factor into your digital product journey. We do the heavy lifting, providing meticulous site UX teardowns that boost long-term conversion, strengthen brand loyalty, and make your customer journey a speedy, smooth sail.

Oddit Reports are all about high-value insights, quick turnaround times, and a true fresh perspective for your team.

Ready for a taste of Oddit magic? Get A Free Quick Win for your website. Choose a page on your site, and our squad will redesign a key section, optimize it for conversions, and walk you through the changes—all for zero cost. It's time to make your site work smarter.

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