One of the biggest challenges of running an online store is constantly increasing your average order value (AOV) to offset rising business costs.
You want your company to be profitable, not just breaking even.
The main way that Shopify merchants offset costs and sell more products is through upselling.
This means finding thoughtful and effective ways to recommend personalized products that their customers will add to their shopping carts.
In this article, we’ll explain why AOV is important, how you can determine your store’s AOV, and offer tips on how to upsell more products as post-purchase offers during Shopify checkout.
Your average order value (AOV) is an ecommerce metric that tells you how much revenue you’re selling on average per transaction. In other words, it’s how much on average that your customers spend.
To calculate average order value, take your total revenue and divide it by the number of transactions over a given amount of time, typically a month.
If you have a Shopify account, you can see your AOV chart on your dashboard which displays your current AOV and any increases or decreases since last month’s figures.
Thanks to Shopify’s Analytics page, you can see accurate store metrics updated within the minute of you opening the page.
This means you can monitor your AOV at any time and have an accurate understanding of where you’re at.
It’s recommended to check in on your store’s stats on a daily basis, not only looking at your AOV metrics, but other important metrics such as:
By checking on these metrics daily, you’ll be able to spot problems early on that may be costing you sales, whether it’s broken links, product stock errors, or a high bounce rate.
Often, your AOV will be impacted by the other metrics. Analyze them all together to get a larger picture of existing issues before they end up reducing your AOV.
For example, if you notice your store has a high cart abandonment rate, then make sure you’re giving customers the option to checkout as a guest.
Or if your bounce rate is high, check your store’s website speed to make sure it’s loading properly, or else visitors will bounce within a few seconds of landing on your site.
Most online businesses know the importance of driving website traffic to their store, without it, there would be no sales.
However, without understanding their current AOV, they may end up spending more money on digital advertisements than what they make back in sales.
Customer acquisition spending has risen 60% in the past eight years because of increased digital advertising costs. So even though a Shopify merchant is bringing in new customers to their store, they still end up losing around $29 per transaction!
Knowing your AOV will help you come up with marketing and pricing strategies that make sense for your business goals, and help you determine your online advertising budget so you’re not spending too much money on Google Ads or Facebook Ads.
By increasing your AOV, you’ll be able to offset the increased costs related to customer acquisition, digital advertising, and inflation.
One of the simplest sounding solutions to increasing AOV is to raise your store’s prices, however, this may have the unintended consequence of turning away more customers.
Since we know the main reason for cart abandonment is caused by high prices, let’s examine some tried and true methods for boosting AOV that will enhance your customer’s experience, and sell more products.
Shopify allows merchants to list up to 100,000 items. However, most Shopify stores usually have less than 50 different products.
One of the best ways to sell more products when you have a limited product range is to bundle similar packages together on the same product page.
For example, if you’re selling socks on your page, offer different bundling options, such as the 6-pack, or 12-pack of socks, instead of just having the generic drop-down quantity menu for users to select their own quantity.
By bundling products, you can also offer a slight discount that will incentivize your customers to spend a bit more money to get a great deal.
You’ll want to be careful about cross-selling and upselling your customers too much during the pre-purchase stage before they have completed their purchase.
Too many pop-ups and upsell offers can bog down the shopping experience and cause your customers to abandon their carts before they finish shopping.
Instead, use a one-click upsell funnel to present your customers with up to two last-minute product recommendations after the checkout page.
With just one click, your customers can accept or decline the offer, which will then automatically be added to their order. Earning enough accepted offers will gradually raise your average order value.
Using CartHook, Shopify merchants have gotten a 15% conversion success rate when placing a one-click upsell in the post-purchase stage of the checkout process.
According to one study, a personalized shopping cart product recommendation influenced around 92% of customers to place a purchase.
By using CartHook, you can set up multiple product offers, or “funnels” that automatically display the most relevant product upsell based on your customer’s shopping cart contents, giving them a more personalized experience and upselling them to boost AOV.
If you want to improve customer loyalty while also boosting AOV, offer free shipping and special discounts to customers once they reach a certain pricing threshold. For example, offer 10% off orders of $100 or more.
Additionally, you can opt to raise your free shipping thresholds to encourage customers to spend more money in order to receive free shipping.
One aspect of boosting AOV is through improving your customer retention, as it’s easier to sell to existing customers than new customers.
Existing customers also spend more on average the first-time buyers, making customer retention an important strategy for gradually improving AOV.
To reward your loyal customers for shopping with your store, consider using the app UpOrder to customize your transactional and post-purchase emails sent to customers immediately following their orders.
Using UpOrder, you can create limited-use discount codes using your customer’s first name to encourage repeat purchases right away.
Additionally, you can embed more product recommendations based on your customer’s shopping history at the bottom of order confirmation and shipping confirmation emails.
These generally receive the highest open rates of all marketing emails.
CartHook is an app that creates easy, one-click post-purchase offers to the Shopify checkout page—with no coding required!
Automatically recommend targeted products and cross-sell items during the checkout process that your customers can easily add with just one click.
Most Shopify merchants will see an average 15% acceptance rate on post-purchase offers and 10% revenue growth.
Download your free trial of CartHook today and watch your AOV grow!