Average Order Value: 6 Highly-Effective Tips
The Average Order Value (AOV) is the average money amount that a customer spends an order on your Prestashop website with you.
With the conversion rate (CR) & revenue per visit (RPP), the average order value is the most important value that an online store based on Prestashop must increase to be profitable.
Because increasing AOV is the easiest way to increase profits, merchants need to try to improve it first, which is the process of making more money out of each customer.
What you have: You launch an eCommerce business to consistently market and sell your products.
What you do: You try many ways to get more traffic. For example: spending thousands of dollars on Google Ads or Facebook Ads, focus much of your energy on writing articles, and optimizing your website.
In fact: more traffic does not equal more success.
Increasing AOV does not cost money, but increasing traffic does. Encourage your customers to buy more expensive products and more products!
You know What Average Order Value means, and the next question is How to calculate AOV and especially How to increase the average order value?
You will learn about:
I. How to Calculate the Average Order Value.
Here is the simple formula to calculate the average order value: Average Order Value = Total Revenue / Number of orders.
Let's look at a hypothetical situation in which Carol, a beautiful woman from Paris, spent £6,000 on a total of 3 orders. This means that, on average, Carol spent £2000 for each purchase from your store.
Let’s say that in the day of the week - Tuesday, you have a total of 2000 orders. If your site's sales were £100,000, that meaning the AOV for Tuesday is £50.
II. 6 Highly-Effective Tips to Increase AOV.
Here is the most important question: How to increase Average Order Value? There are 6 tips that may increase your average order value, and they are essentially different ways to get your customers to checkout with larger carts.
1. Upsell or Cross-sell to Increase Basket Size.
What is Cross-selling: You invite customers to buy a related or a complementary product to make a profitable sale.
In contrast, upselling is when you promote the more expensive items or other add-ons. They are pretty magical. They both focus on providing additional value to customers.
Here’s how Jimmy (Atalanta) uses OPCS module to deploy a cross-sell tactic on his Prestashop website. This tip increases the AOV up to 15%.
2. Setup Quantity Discounts.
Setting up a quantity discount is easy on Prestashop. Quantity Discounts (Volume-based pricing) also is a very handy tip. You could see it not only from the physical store but also from the online store. A customer buys a lot at once to get a lower price per unit.
Might someone be tempted by an offer for 3 snack bags for the price of 1.
£5 each or 3 for £10?
First, quantity discounts help you to close your first deal. And because you continuously want to beat the competition, you want a specific customer who seeks the lowest price. So, this is an excellent way to go to get the customer and a large order – for a smaller margin.
It is a strategy that provides discounts for purchasing a product or service in high volumes.
There are many different formulas companies use to promote buying larger quantities.
For example, you could offer 5% off on orders over £100 or 10% on orders over £200. This could be either a percentage-based discount or a monetary discount.
You should create some quantity discounts for Manufacturer Specific Price Lists:
By using ConvertWhale module, you can not only create the quantity discounts but also show the promotion message on the product page, with a timer countdown to make it obvious that you're offering the quantity discounts.
Perfect your volume-based pricing strategy to make it profitable for every single deal.
3. Make Better Product Recommendations.
Shows the smartest product recommendations to your product pages or checkout page.
You can sell some slow-moving stock, provide recommendations based on attributes and price of the product the customer has chosen or your own business priorities.
4. Next Order Coupon.
This unique way of after-sales marketing will give your customers with dynamically generated coupon codes while they place the orders.
By this way, you encourage them to buy more by providing offer codes to their next order.
ConvertWhale module will allows you to define coupon amounts as a percentage of the order that triggers the coupon or when the voucher will be sent: while a customer places an order or after order completed.
5. Set Order Minimums for Free Shipping.
You can also increase the average transaction value by incentivizing customers to spend a minimum amount for free shipping.
Your offers should be shown on the product page or checkout page to make sure your customers to think about adding some additional products to meet the condition. For example, in offers free shipping for all orders over £100 or only offering free shipping for certain products, which is easy to set up in Prestashop with ConvertWhale.
6. Sell more to loyalty customer.
Creating a customer loyalty program helps you increase the average order value and motivate your customers to keep coming back to your online store.
Loyalty customers spend 70% more than new customers as a result of they know your brand and believe in you.
And last but not least: They tell their friends regarding positive experiences. Word-of-mouth marketing is simpler at driving new customers than advertising.
New groups for loyalty customer
- Create new groups: Back Office ->Shop Parameters ->Customer Settings->Groups.
- You might want to set up a discount for this group, but we do not recommend using this option because it does not make a profitable sale.
On the next step: Reward loyal customers by offering cumulative discounts on selected lines or giving away free items with multiple purchases for a limited time (using ConvertWhale).
Select customers for these group
- Option A: Select some specific customers based on their purchase history.
- Option B - the better way: Sell the membership subscriptions and select these customers who bought the subscriptions into the loyalty customer groups.
ChargeMe will helps you power a subscription business on your Prestashop website for secondly.
Reward Loyalty Customers
Now you have a list of the most valuable customers. Give them some best offers, and you'll be able to expect to visualize the AOV increase considerably. ConvertWhale allows you to apply the Volume-based pricing for customer groups.
The key point: focus on your customers.
Rather than prioritizing client acquisition, you ought to specialize in ways that encourage each loyalty client and prospective customers to pay extra money on your online website.