Hacks on how to increase your customers' average spending
So you created your ecommerce business and things are looking pretty great: sales are going great, traffic is on point, ads seem to do what they have to do. There is only one thing that bothers you: all the orders that are being made are of a low amount which results in a limited profit from each customer and it seems like the increase of your revenue has come to a halt.

The only thing you want from your customers is that they spend more money with you, it's as simple as that. But how do you achieve such a goal? I wrote down some hacks on how to help you encourage your customers to spend more with you.
What is Average Order Value exactly?
First let us take a look on what AOV or Average Order Value actually means. AOV or Average Order Value tracks the average amount being spent each time a customer places an order through a webshop. To calculate your shop's AOV, you divide your total revenue by your total number of orders.
So for example let's say that this month your webshop made € 18 000 in the month September and you had total of 300 orders: €18000 divided by 300 results in an AOV of € 60.

Online businesses use AOV or AS (Average Sale) as a key indicator in understanding their customers' purchasing habit. AOV is a key metric and just like others, AOV can be tracked over any time period. Most companies monitor their monthly AOV but up to you to find out what periods work best for you. This key indicator is already implemented in our Sayl Retail Dashboard so no need to worry on how to calculate this.
Why is it important to keep track of your Average Order Value?
Knowing how much your customers spend with you is an amazing feature to have. It helps you to analyze and create better insights in your online marketing efforts and your pricing strategy. If analyzed and monitored effectively it can help you set up goals and strategies to increase your webshops revenue.

With every webshop there's a transaction cost for every transaction made, so increasing your AOV is a direct increase to your profits, since your client is already buying from you.
5 Tips for improving your Average Order Value
#1. Upselling

Upselling is an important sales technique which basically comes down to persuading your customers to purchase a more expensive, upgraded version of the chosen item or other add-ons for the purpose of making a larger sale.

There are multiple reasons on why should actively try and upsell to your customers:

  1. Making a customer who was already going to buy from you spend more on a better, more qualitative product is easier than making a new customer. You probably heard this before but it costs you 5x more to acquire a new client.

  2. It shows your customers that you care! You don't want to make more money, no, you just want the best for your customers.????
#2. Cross-selling

Cross-selling is a sales technique closely related to upselling: both are to optimize revenue by making your customers spend more on your shop. Cross-selling comes down to promoting a complementary product, persuading your customer to buy a product related to the products that he's already plans on buying. According to Amazon cross-sales attribute for up to 35% of their sales. For example a client buy sneakers, you try to cross-sell him socks.
#3. discount on volume or amount

By giving discounts to customers who buy big quantities or big amounts you can try and give them a discount. This can be easily implemented with everything where you notice a trend of people buy more than one.

Let me again use my socks-example: if most people only buy 2 to 3 pairs of socks, promise them a 5th pair for free if they buy 4.

If you notice that there are a lot people spending 70 bucks with you, stimulate them to spend 100 bucks with you by offering a gift, gift card, discount. Optimizing this technique might take some time until you figure out how you create most profit but it's a guarantee fun when A/B testing this!
#4. Customer loyalty program

Famous around the world thanks to that 11th free coffee you get after purchasing 10 in your favorite coffee shop.

A customer loyalty program helps you creating a community around your brand and it forges relationships with your customers so when their next purchase is coming up, they think of your goodwill.

By linking spending points to people their account you can offer them discounts after reaching a certain amount of points. You might think that this won't benefit your AOV since it doesn't matter if they spend little or plenty, they're getting points anyway.

The guys at smile.io did some research on this matter and they found out that "the majority of brands see at least a 13,71% increase in order values from rewards program members over non program members."
#5. package deals

Package deals are basically the cross-selling without your customer knowing of it. Creating package deals demands only a minimum effort from you and you create an easy way for your customer to spend more with your shop. Selling perfume together with deodorant. Shoes with an extra pair of socks. You name it.

Carmarket Cardoen in Belgium pushed this even by instead of giving a €5000-discount, they gave their customers an extra car worth €5000! Of course they didn't tell them that they're getting a car instead of a discount. Believe it or not but this sales technique kept the company from bankruptcy and even reclaimed the title of market leader in second hand cars!
There you have it: 5 hacks on how to make your customers spend more with you! Don't panic in case your AOV doesn't double up overnight, implementing these hacks is journey that will demand time and perfection. Next to these hacks don't forget to run ads and invest time in making your ecommerce grow.

In case you want to know more on how to sell on Facebook and Instagram, I also wrote an article with tips on that. Click here to read it!
Or you want to grow your ecommerce business by using Facebook ads, click here to read all about it.
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