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The E-commerce business has become a crowded and tough space in the last few years, especially after COVID-19 as people have gotten used to purchasing stuff online, even the necessary ones. Almost every e-commerce business is coming up with their subscription plans. With the ever-growing cost of acquiring new customers, it has become vital to retain your existing customer base and boost the AOV of your business.
However, it’s an uphill task for companies to manage their daily operations while providing the best products and services which is why we have some top apps on Shopify for AOV growth that will not only increase revenue per order but also improve the return on investment (ROI) of your marketing efforts. However, before going forward you should understand what AOV is and how it can have an impact on your business.
AOV is one of those key metrics in e-commerce, which yields valuable information about the buying behavior of customers. It is representative of the average value of the orders a customer places during a specific period. Indeed, businesses must get an understanding of what exactly AOV means, as it reflects the efficacy of marketing and pricing policies adopted by them.
AOV has become very pivotal in judging customers' purchasing habits. By analyzing the AOV trend, an organization can identify and develop a better understanding of customers' interactions with its products or services. For example, it may indicate that an increased AOV reflects a positive customer reaction to the products based on their price or marketing strategy; on the other hand, a decreased AOV may be a signal for necessary interventions on price and/or marketing strategies.
It implies that AOV is one of the prime tools for evaluating the strategies put in place by brands. Also, it helps them to identify the loopholes in their tactics and improve their plans accordingly. When companies analyze their AOV, they can gain an insightful view of their business which further helps them to make data-driven decisions for the future of their business.
Average Order Value as the name suggests is calculated simply by ascertaining the average of the value of orders during a specific period (usually a month). For example, if your business generates a revenue of $50,000 in a month from 10 orders. In this case, your average order value will amount to 5,000 dollars for that month.
AOV = Total revenue during a specific period/ No. of orders
AOV tracking provides valuable insight into understanding trends, analyzing campaigns, and instituting practices that encourage customers to spend more. A higher AOV means customers are buying more items or buying at higher prices, which could substantially improve the bottom line for your business.
Let’s discuss in detail of the top strategies to increase AOV for your business and which are the top Shopify apps which helps you in the process:
Product bundling is versatile, intended for a wide range of e-commerce companies, not just subscription box ones. You can encourage customers to buy more by selling a group of products at a discount. This creates value and will help with your sales and average order value.
Loop Subscriptions bundle builder feature allows you to style your bundles according to your brand tone. Brands can also customize CSS and JSS to style and enhance the functionality of their bundles respectively. Additionally, you can make modifications to your bundle feature like add, remove, and swap products or add one-time products to ongoing subscriptions.
Other features of Loop Subscriptions include setting up tiered or volume discounts depending on several items easily and forwarding customers to a custom URL to upsell upon the creation of their bundle. Brands can easily configure tiered or volume discounts based on the number of items and redirect customers to a custom URL for upselling when they create their bundle.
Cross-selling and upselling are some of the most excellent approaches to increasing the average order value and boosting revenue. Cross-selling will recommend a related product according to customer history to enable one to purchase more. Upselling suggests higher-priced alternatives and explains the value to them. It is critical to apply these techniques at various stages of a customer journey where it could make a positive difference in boosting sales.
Let me repeat, Cross-selling and upselling should always be about customer satisfaction and offering value to customers. Then you will manage to increase customer loyalty and higher average order values.
Vitals is an All-in-One Marketing & Sales app that creates upsell and cross-sell campaigns for brands. It assists in increasing sales and conversion using cross-selling and upselling during checkout. With the app, you can also promote urgency with Buy One Get One deals and stock scarcity timers.
Source: Vital’s home page
Other features of the app include capturing pre-orders for out-of-stock items, using sticky add-to-cart buttons, and a cart reserved timer to encourage faster checkouts. Display recently viewed and related products to inspire additional purchases.
Email marketing is an extremely effective marketing channel that provides you with a direct line of communication with your customers. According to the HubSpot Research report, for every dollar spent in email marketing by e-commerce businesses, the average return on investment is about $45, hence very effective in return on investment.
E-mail marketing has far-reaching effects and a decent ROI which makes it one of the most effective tools to improve AOV. If carried out perfectly, email marketing can result in more conversions and increased profits. You can send personalized emails to your customers based on their behaviors and history.
For example- Sendlane has an extremely powerful feature called multi-variable segmentation, which helps in cutting and further chopping your customer list into smaller groups based on what their behavior seems to suggest. You are going to love the much better flexibility when it comes to crafting targeted campaigns to clear customer segments, recent buyers, or big spenders.
Fundamentally, this capability for segmentation allows brands to test different campaigns, messages, and strategies to optimize and improve their marketing efforts.
Personalized offers and promotions can substantially improve the average order value. The custom discounts and incentives of individual customers have to present a more engaging shopping experience, and this can encourage them to spend more. One of the strong approaches will be sending personalized emails either regarding abandoned carts or special discounts on items within their wishlists.
It will act as a reminder to the customer of their interests and will be a catalyst in nudging them to complete their purchase. Also, visual promotional campaigns that have well-defined CTAs are more likely to lead to better conversion. Therefore, this has been proved as one of the most effective methods of increasing AOV for brands.
Smiles is a Shopify loyalty program where you can build your loyalty program yourself. The customers get the points and can thus use them to get rewards. You can reward with points, referrals, or gift cards. You might want to think of adding a Shopify affiliate program to increase the average order value.
According to Smile, with the use of loyalty rewards, there will be around a 39% increase in order value. In this way, the customer will feel he/she is saving money by earning and using rewards.
Many e-commerce shoppers check the free shipping threshold before adding items to their cart. A good 21% of US shoppers will not tolerate late delivery, and fast shipping options are expected. Showcase your free shipping threshold front and center to raise your average order value.
CXL research cites that delivery fees are among the major reasons for cart abandonment. Shipping is becoming a costly affair, especially on holidays like Christmas and Thanksgiving. Provide carefully calculated free shipping thresholds, assuring you cover the cost of offering it without losing your profit.
Essential Free Shipping Bar is a very hands-free Shopify application that would help in increasing your average order value. It shows a progress bar with which customers can see how much more they must purchase to receive free shipping. Several free shipping bars can be added on one site, and different goals can be set to raise customer spending. This app is highly recommended to take your e-commerce site to the next level.
Average Order Value and is one of the most important KPIs of any ecommerce business, influencing revenue directly through the consideration of the amount each customer spends on average per transaction. Businesses can boost their AOV radically by implementing tactics that get customers to either buy more products or higher-priced products to drive profitability.
In this regard, AOV requires regular analysis and tracking to create high-value insights into customer behavior and provide chances for optimization. Knowledge of the factors that affect AOV will enable a business to take certain steps toward making customers spend more and improving its bottom line.
Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.
