Let me tell you in my years of running my online business I’ve learned that keeping a close eye on metrics is crucial.
And one metric that’s really stood out to me one that can truly tell you how well your business is doing is Average Order Value (AOV).
Now I know what you’re thinking.
Another acronym to remember? Trust me I’ve been there.
But don’t let the acronym scare you off.
Understanding AOV and how to boost it can be a must for your business.
It’s one metric you definitely want to get to know.
So let’s break down AOV.
Essentially it’s the average amount of money your customers spend on each purchase.
when they click that “buy now” button.
It’s a key metric especially for online businesses and it should be a regular part of your analysis.
I aim to calculate mine at least weekly sometimes even daily.
The good news is figuring out AOV is a piece of cake.
You just take your total revenue for a period and divide it by the total number of orders.
Let’s say for example you made $10000 in May and had 300 orders.
Your AOV would be $10000 divided by 300 which equals $33.33. Easy peasy right?
Now one thing to keep in mind: AOV is the average for all your orders not the sales per customer.
Imagine a customer who places multiple orders in a month.
We don’t lump those together.
Each order stands on its own.
Why AOV Matters: A Deep Dive
You might be thinking “I know how to calculate it.
But why is it so important?”
Well AOV is like a window into your business revealing valuable insights that can help you make smarter decisions.
Here’s the lowdown:
AOV as Your Marketing Budget Guide
Firstly AOV gives you a concrete idea of how much you can spend on advertising.
Once you know your AOV you can subtract costs like the price of your product employee wages and other expenses.
What you’re left with is your potential marketing budget.
This is super useful for planning out your advertising strategy.
You see AOV and marketing are closely intertwined.
AOV as a Gauge for Order Bumps and Upsells
Secondly AOV helps you measure the effectiveness of order bumps and upsells.
those irresistible offers that pop up on your checkout page? If your AOV feels a little low it might indicate that your order bumps and upsells aren’t hitting the mark.
These offers are fantastic for encouraging customers to buy more so you want to make sure they’re converting well.
Experiment with different messaging and see what resonates best to increase your AOV.
Strategies for Boosting AOV: A Practical Guide
Now you’re ready to make your AOV work for you.
But how? Well there are a bunch of different strategies you can use to get that average order value climbing.
Let’s explore some of the most effective ones:
Rewarding Loyal Customers: Making Them Feel Special
One of the best ways to boost AOV is to reward your loyal customers.
Think about it from their perspective.
They’ve bought from you multiple times and suddenly they get a special offer just for them.
It feels good right?
Consider creating exclusive funnels deals or promotions that are specifically designed for repeat customers.
This shows them you appreciate their continued support and can lead to a significant increase in their average order value.
The Art of Upselling and Cross-Selling: Expanding the Cart
Upselling and cross-selling are all about getting customers to buy more more more! With upselling you offer a higher-priced or premium version of the product they’re already looking at.
You highlight the extra benefits and value it provides.
Cross-selling on the other hand introduces a different but complementary product.
You show them how this item can enhance their original purchase and offer them a seamless way to add it to their cart.
Both methods are powerful tools for boosting AOV.
Think about the last time you bought a new gadget.
Did you also purchase a case or screen protector? That’s cross-selling in action.
Free Shipping as an Incentive: Leveraging the Power of Freebies
Customers love free shipping period.
It’s a proven way to encourage them to spend more.
In a study by UPS they found that over half of online shoppers added items to their carts just to qualify for free shipping.
It’s a psychological trigger that works wonders.
So how can you use this to your advantage? Implement a free shipping order bump.
Offer free shipping to customers who spend a certain amount.
You’ll be surprised at how many will bump their orders just to get that sweet sweet free shipping.
Split Testing: Finding What Works Best for Your Audience
Sometimes boosting AOV requires a little trial and error.
Think of it as an experiment.
You tweak elements of your sales funnel to see what performs best.
This is where split testing comes in.
You create two versions of your funnel.
The first is your original tried-and-true version.
The second version is your new version where you’ve made changes.
Maybe you’ve altered the headings switched up the button colors or added a visual element.
You then run both versions side-by-side comparing the results.
The version that delivers the best AOV is the one you stick with.
Leveraging Tools to Simplify the Process
I know all this might sound like a lot but there are tools out there that can make things easier.
And Clickfunnels is one of the best.
It gives you everything you need to increase your AOV from split testing to upselling and everything in between.
Boosting Your AOV: Your Turn to Share
So there you have it.
A into the world of AOV.
It’s a metric that can truly make a difference in your business.
By understanding it you’ll gain valuable insights and the ability to make strategic decisions that drive growth.
Now I’d love to hear from you.
What strategies have you used to increase your AOV? Which ones have worked best for you? Let’s share our experiences in the comments below!