When online business owners look for ways to increase their overall profit, they often turn to SEO, content, and general marketing strategies.  While these tactics are essential to maintaining a successful store, there are other under-appreciated ways to boost your income, such as increasing the average order value and increasing purchase frequency.  This article, 6 Simple Steps to Increase Average Order Value, is the first post of a two-part series designed to help with these two undervalued ways to manage your shopping cart profits.

What is Average Order Value?

Average Order Value (AOV), and how to increase it, is an essential revenue concept for any SMB owner to understand. Basically, your store’s AOV is the average amount of money each customer ends up spending with each individual online transaction they make. You can calculate your average order value using this simple formula:

Total revenue / number of orders = average order value

Why does the Average Order Value matter?

shutterstock_307509524Some benefits of increasing your AOV are readily apparent, like increasing your sales and profit margins, but there are other advantages, as well. When you increase your AOV it  can potentially act as a buffer.  If your income dips due outside fluctuations such as drops in search ranking, SEO changes that make traffic sources disappear, or any other potential, unknown reason,  a strong AOV will absorb the shock of the change.

When you increase your AOV, you will save on costs that can be incurred while trying to increase your traffic or acquire new customers.  Successfully increasing your AOV at checkout also provides a more reliable income stream since it capitalizes on an audience who is already spending money with your company.


A 10% increase in AOV is better than a 15% increase in traffic so let’s get started with some simple tips and effective marketing strategies that can help your business increase revenue.

1. The Shopping Cart – An Important Focus!

Where’s the cart? When dealing with sales completion, the most important part of any SMB website is the eCommerce shopping cart.  Your customers don’t want to spend too much time searching for it, and you don’t want them to waste shopping time finding it! Don’t tuck the cart icon in an obscure place or make the cart button much smaller than other aspects on your page. Make your cart easy to find. It’s easy to do by increasing the size of the icon or changing its position on the page.

2. Free Shipping Requirements –  They Work!

Free shipping is the single most effective way to attract business. According to Deloitte, 40%  of customers are willing to buy more items if it means their purchase will qualify for free shipping.  With a little planning you can incorporate this knowledge (Shoppers just love free shipping! Really! They do!) into your online store to increase your AOV. In order to make free shipping work for you, just follow a few basic guidelines:

  • Analyze your profit margin and calculate how much your sales need to increase to offset the cost of shipping.
  • Then, with increasing your average order value in mind, set a minimum purchase level to qualify for free shipping.
  • Be sure to set your threshold slightly above your average transaction total, but not too much higher.
  • Keep in mind that if your average transaction is $30, setting free shipping at $75 is quite a jump for your average consumer.

3. “Cash-Back” Offers –  Brings ’em Back!

While “free” is definitely the most effective draw in marketing, “cash-back” isn’t far behind. “Spend $50 and get $5 cash-back on your next visit!” ads are frequently seen on websites and in catalogs because they are effective. You can use the same financial guidelines for cash-back offers that you use for free shipping. To increase your AOV, set a spending threshold slightly above your current average order amount to qualify your shopper for a cash-back reward which can be used on the customer’s next visit. This not only creates an immediate AOV increase but also encourages return visits, potentially turning one-time visitors into loyal fans.

Once you’ve determined your threshold and the incentive you wish extend to your online browsers, format your offer boldly and clearly to ensure visibility on your webpage. Display your free shipping or cash-back banner front and center on your website homepage and on every page that is clicked. As with the shipping requirements, customers will keep that target number in mind as they shop and add products to make it to the free shipping or cash-back minimum.

average order value

Upselling is a great way to boost your average order value!

4. Upsell Strategies – They’re Effective!

Upselling is persuading your purchaser to buy an upgraded, better quality product, and is an effective Average Order Value strategy. Let your customer see the benefit and cost savings of a newer product you offer when they have already decided to complete the sell and are at their most receptive. Make sure your upsell suggestion truly is of benefit to their transaction by displaying products more sophisticated, upgraded, or luxurious than they had originally chosen. According to ConversionXL, if you make a meaningful, valuable offer, up to 35% of your customers will likely accept, which can substantially increases your sales AOV.

5. Cross-Selling – It’s Creative Customer Service!

Have you ever ordered something, had it arrive, excitedly opened the package and prepared to use it… only to realize… it needs batteries! If the site you ordered from had offered you batteries at checkout, which is a prime example of cross-selling, you would likely have added them to the shopping cart during your purchase, avoided frustration, and had a much more satisfying customer experience.

Cross-selling is convincing your shoppers to add-on additional products that will enhance the first product they are purchasing. Offering items that a customer needs actually helps them by improving their buying process, and can potentially turn a one-time purchaser into a returning customer. Effective cross-selling will increase your average order value by reminding or encouraging visitors to add to their order.  Fortunately, it also leaves them pleased with their experience, even though they’ve made an additional purchase. Keeping the focus on consumer needs will help you successfully cross-sell.

6. Related Products – Really Raises Revenue!

Another good AOV tactic, which is very similar to cross-selling, is product recommendations. Personalizing the shopping experience with recommendations of related products can increase the number of items purchased, raising your average order value.  You would simply be showing your online audience more options of items they are already interested in. Two effective methods of offering related products are:

  • Related Product Links – Context is crucial when utilizing product recommendations. You should ensure the items you recommend are clearly related to, and comparable with, other products your customer has viewed or added to their cart.
  • Bundling – Another good way to offer related products and increase your average order value is by offering product bundling. Product bundling is simply providing the shopper the option of buying a combination of pre-select, related products – often at a discounted price. Bundling a computer with a wireless mouse and headset for a 10% discount entices the customer to enlarge their total order.

Offering related products and bundled packages customizes the shopping experience for your customers.  But be careful to avoid overwhelming your consumers with dozens of products.  Always ensure your suggestions will be helpful, but not feel pushy. Utilizing related product tools provides individualized bonuses which are relevant to your customers interests.  This can assist your them by reducing browsing time and decreasing web navigation frustration.

How you incorporate AOV strategies into your website will vary, depending on your e-commerce software. If your eCom platform doesn’t include these basic AOV features (and it should), adding a plug-in to your shopping cart software could be an option.  If it’s not, consider upgrading to a better shopping cart software.  Making use of these powerful tools is a simple and cost-effective way to increase your average order value. The cream of the crop web store builders will often include these features at no extra cost and some companies also provide online or phone support to help you integrate the changes that will increase your average order value and improve your SMB’s revenue.

Start optimizing for AOV today. No matter which of these sales strategies you use, your average order will increase and your customer will be happy with their additional purchase.

Do you have any questions about increasing your average order value? Or would you like to share any sure-fire tips for improving your AOV?
Let us know in the comments below!