How to Boost Your Average Order Value

When I was in college, a long time ago, I had to take a statistics class. I can't recall much from that class (other than I remember barely going, and sitting in the back when I did). But I did learn the difference between mean, mode, and median. Turns out, when it comes to increasing your average order value in eCommerce, that's helpful.

When it comes to metrics, your average order value (AOV) is one of the most important ones to track. And if you've never thought about it, you've definitely experienced it.

Ever had someone offer you fries for your order? They were boosting their average order value.

Every stood in line to check out at a Best Buy and noticed all those little extras you could put into your real, physical cart? They were increasing their average order value.

So you've experienced it. Now it's time to embrace it for your own online store.

What is your Average Order Value (AOV)?

When it comes to increasing your average order value, we should probably start with a definition. I'd tell you it's exactly what it sounds like, but I don't find that it's helpful because of those terms I threw out already (mean, mode, median).

You could take your total revenue and divide it by your total number of orders and you would get your AOV. Technically it would be accurate.

But I don't think it would be helpful. So how do you calculate your AOV? Here's my recommendation.

How do you calculate your AOV?

Let's break out what those three terms mean.

  • Mean: this is the actual average.
  • Median: this is the middle value of all the orders.
  • Mode: this is the most frequent value.

So when we talk about AOV, I'm suggesting you look at all of them, but really focus on the mode.

Take the list of orders in any period and find the most frequent value. That's the one we'll use as a baseline for our AOV.

Why is AOV important?

I may have moved too quickly into the math of it all, so let's back up for a second to talk about the “why” behind boosting your average order value.

Every campaign you run has a cost. Right?

Whether you're buying Facebook Ads, Google Ads, sending out postcards, or any other approach to your campaign – you're spending money.

So when you compare the efficacy of your campaign, you're going to look at which channels brought in more money.

But what if you could drive greater amounts of revenue without increasing your costs? Regardless of your approach. Wouldn't that be incredible?

That's your “why.”

When we increase your average order value, we're driving revenue up without introducing correlated costs.

So what tactics have others uses to increase their Average Order Value?

I'm going to move you quickly thru four tactics you can use. I'll share more later. Today I want to show you a powerful plugin for WooCommerce that can help you with all of this.

But first let's look at four tactics that are pretty common.

Define a minimum order for free shipping

This approach is pretty easy. You know what your most common order value is (from above), so push your minimum a bit higher and make that the required minimum for free shipping.

If most of your orders are around $57, then you might say, “Get free shipping when you spend $75 or more.”

The numbers depend on your specific store, but it can be really powerful and most of the work is work you've already done to figure out your AOV.

Automatically apply discounts for larger orders

I'm a big fan of automatically applying discounts rather than having people leave my store to find a coupon code. It's why I run Discount Rules for WooCommerce Pro on most of the WooCommerce stores I build.

When a customer is getting close to my AOV, I want to encourage them to spend more. So I might use a popup to let them know if they buy XX more, they'll get YY discount. I created a video showing you how to do this with WooCommerce, Discount Rules and Ahoy as the notification component.

Offer bundles

Bundles are a great way of increasing your average order value. You know that some people will need more than a single item – because of the products you sell and the customers you have.

For example, if you're selling printers, you know they need ink and a USB cable.

So bundle it all together. The approach Amazon takes is awesome because it's not officially a bundle. It's just a suggested set of items that are normally bought together.

Create special first-time buyer offers

The last approach is often a little more work because it requires that you know whether a customer is new or not. But let's assume you knew how to do that (see below). Then this tactic is also not that hard.

You simply want to limit a coupon to only those who have never made a purchase before.

Check out Smart Offers

On Mondays I write about WooCommerce – either on something new that appeared in the last week, or based on a question recently submitted to me. This past weekend I got a question about driving up average order values, and I knew that the testing of Smart Offers would be a great way to connect the two (answering a question and showcasing a product you may not know about).

If you don't recall, I listed them in an earlier Monday post about post-purchase offers.

Let's look at how easy it is to use Smart Offers to drive up your average order value.

Everything starts when you click “Add New” to create a new smart offer. All that text and code in the window is already there. You just have to put in the title in the top part, and again in the headline.

What you see above is that I wanted to offer an accessory product (USB cable) when customers get to the cart and have something specific in their cart.

That's what comes next, where I define the offer rules. They have tons of options. Here I'm looking for the cart to have any product from a specific category (microphones).

Now it's time to tell Smart Offers where to show this offer. For this, I want to show it on the cart page. In other words, customers will add a microphone to their cart, be re-directed to the cart, and then see my offer for this USB cable, at a 10% discount.

That would take a $99 cart and add $17 (10% off of a $19 cable). That means I'm shifting my AOV up by roughly 16%. Not bad, right? The “ad” automatically shows customers an “accept” offer and a “skip”, so Smart Offers gives you choices about what to do.

As you can see here, I can swap products (by adding one thing in and removing something else out). I can also simply apply coupons. Or I can move the customer thru a series of funnel offers.

In this example, I just wanted to add the item to the cart and get ready for checkout. Here's the pop-up (which you can do as inline or a pop up).

And here's the resultant cart.

Smart Offers is a smart choice

I know it's a silly and simple example. I know Smart Offers can do so much more. But my challenge to you isn't really about Smart Offers.

I just took a $99 cart and moved it to $116. Not bad for a few minutes work.

What are you doing to make sure you're not leaving money on the table?

Smart Offers starts at $99 for a single year and for a single site. But you can also spend a bit more and use it on 5 sites without ever paying them again.

Check it out and let me know how it goes.