Average Order Value (AOV) is the measure of how much money your customers spend each time they place an order through your online store. Spending more money on each magento order—is a great way to increase sales and revenue in your magento site. Here are five easy-to implement strategies to get your customers to spend more in your online fashion store.
It’s a simple calculation (revenue ÷ number of orders = AOV) that can reveal a lot about your customers and your business during a specific time period.
Why focus on increasing AOV?
In many commerce markets, acquiring new customers is difficult and expensive, it can often require a significant investment in demand generation marketing and advertising.
Increasing your AOV is one of the most efective and cost eficient ways to increase revenue and cash flow (a sign of any healthy business). Whereas increasing site trafic usually involves researching and executing complex marketing plans to attract new customers, increasing your AOV could be as simple as installing a plugin for your shopping cart. Optimizing your site for higher AOV can also help you strengthen your business against unforeseen dips in trafic. You may get less trafic overall but see higher revenues due to increased AOV and more targeted marketing practices. Regardless of why your visitor numbers, your business will be in a better position with an optimized AOV.
So how can you get your customers to buy more items and spend more money with each purchase? This guide outlines five strategies you can enable with little or no extra investment.
1. Product Bundles
Product bundling makes buying multiple items at once easy. Bundles often group a primary product and its accessories (e.g. a dress with matching shoes and necklace); or products that are used for a similar purpose (such as a jacket, scarf, and gloves).
2. Up-Sell and Cross-Sell
Customers browsing your site are usually in shopping mode and ready to buy. This is your opportunity to suggest other products that may interest them—and increase your AOV. Here are two efective marketing strategies you can use:
- Up-Sell Suggest a larger or more expensive version of a product the customer is viewing. For example: If the customer is looking at your small clutch, suggest a similarly styled handbag at a higher price point.
- Cross-Sell Suggest additional items related to the one your customer is viewing. For example: If the customer is looking at a bracelet, recommend a matching
3. Customer Rewards
If you want customers to spend more, you need to give them an incentive. Here are a few incentives that can help increase your AOV:
- Promotions/Discounts Offer discounts for spending more money or buying additional items. Or, offer valuable services such as free shipping when customers spend a certain amount.
- Rewards Points Rewarding customers with points for spending more money on your site is a great way to increase AOV while fostering customer loyalty. The more customers buy, the more points they earn. Points can later be redeemed for discounts, free gifts, and other incentives.
4. Personalization and Recommendations
Customers usually respond when presented with product ofers that meet their needs. The more relevant the product ofers, the more likely they will buy. There are two key methods for helping customers find the right products:
Personalization Marketing is most efective when it’s 1:1. And when customers are shopping online, it’s easy to identify them and personalize their shopping experience. This can be as simple as personalizing a welcome message with your customer’s name, or as sophisticated as personalizing promotions with customer-specific landing pages that feature a specially curated product catalog.
Recommendations Customers often don’t know exactly what they want or need, and are looking for help selecting products. As a merchant you can use information you’ve collected about your customers to help recommend products for them:
- Search Queries: Recommend products based on a customer’s search terms.
- Geographic Location: Suggest relevant products based on customer’s climate/weather, state regulations, and other regional specifics.
- Buying History: Use a customer’s past purchases to recommend other products.
- Customer Segments: Use the purchase histories of customers with similar demographics to recommend products.
5. Easy Returns
One of the biggest concerns customers have about shopping online is whether they can return the items.
If a customer thinks that returning something will be costly or difficult, he/she will buy fewer items to minimize their return risk. However, research shows that the more items customers buy, the more they actually keep (meaning they don’t return more items when the process is easy, they just want to know that easy returns are an option).
Summary: Simplify and Personalize Wherever Possible
Customers want to buy more, and will buy more—if you make the shopping experience easy and relevant to them. The five strategies outlined in this guide are all very diferent in how they get customers to increase the amount they spend in every order. But each of these strategies is similar in that they both simplify and personalize the shopping experience. Whether you’re bundling two or more products into a single SKU or ofering free return shipping, you’re eliminating the friction that slows customers down and prevents them from buying more.
And whether you’re recommending products based on a customer’s demographics (location, age, and gender) or actions (purchase history, search queries, and product views), you’re “connecting” with your customers and personalizing the shopping experience with individualized content.
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