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Seven Ways to Grow Your AOV

Boost revenue and profitability without incurring additional marketing or customer acquisition costs with these strategies for growing AOV.
Jon Cogan
May 9, 2023

Your average order value (AOV), refers to the average amount of money a customer spends each time they place an order on your eCommerce website. AOV can be calculated by dividing your revenue by the number of orders placed. Monitoring and growing your AOV is a crucial part of any eCommerce business strategy because it is an effective and efficient way to boost revenue and profitability without acquiring new customers. The following are some simple ways to grow your AOV and maximize your profits.

Bundles and Packages

Increasing AOV involves encouraging customers to spend more during each transaction by improving the perceived value of each purchase. One way to achieve this is by offering product bundles or packages that combine complementary items. By providing a discount on the total price of the bundle, customers are more likely to purchase more products than they originally intended, ultimately increasing their order value.

Additionally, there are AI tools available that can create personalized product bundles for increased effectiveness. These AI tools use customer data, such as purchasing and browsing history, to generate product bundles that are tailored to the individual customer's interests and needs.

Upselling and Cross-Selling

Implementing upselling and cross-selling techniques is another way to increase AOV.  Suggesting additional and complementary products at checkout, encourages customers to add more products to their order. Remember not to go overboard with upselling and cross-selling, as it can distract from their original purchase and could lead to the customer abandoning their cart altogether.

Minimum Order Thresholds for Free Shipping

Setting up a minimum order threshold for free shipping encourages customers to add more items to their cart in order qualify for free shipping, increasing AOV.  Determining a minimum order threshold can be difficult because you want to encourage customers to make larger purchases without setting it too high that it discourages customers from making a purchase at all. Of course, you need to consider the cost of shipping and the impact it has on your profit margins. A good practice is to set the minimum order threshold slightly above your current AOV to encourage customers to add additional items to their cart. Additionally, you should consider what your competitors are offering and adjust your threshold accordingly to stay competitive.

Tiered Pricing

In a similar vein, tiered pricing can also encourage customers to add more products to their order. One example of strategy is to offer increasing discounts for larger purchases, such as ‘spend $50 get 10% off, spend $100 get 20% spend $150 get 25% off.’  Like setting a minimum threshold for free shipping, tiered pricing incentivizes customers to add more products to their cart to reach the next discount threshold.


Loyalty Programs

Loyalty programs reward customers with points for purchases. These points can be redeemed for rewards or discounts on future purchases. By offering points for purchases, customers are encouraged to spend more to earn more points and unlock better rewards.

One very successful example of this is Sephora’s loyalty program. Sephora’s loyalty program uses a tiered system, Insider, VIB (Very Important Beauty Insider), and Rouge. Members progress through these tiers by spending more money at Sephora. Each tier has its own set of rewards and benefits, which incentivizes customers to spend more to achieve a higher tier.

Offer Financing Options

Offering financing options, such as instalment payments, can help make customers feel more comfortable making large purchases because they can pay smaller amounts overtime instead of a large sum upfront. Not only can this increase your AOV, it can also increase customer satisfaction and loyalty. There are several popular instalment payment options including AfterPay, Klarna, Affirm and Sezzle.

Use Scarcity Tactics

It is understandable that most customers are more hesitant to make large purchases compared to smaller purchases. Scarcity tactics, like limited time offers or limited stock availability, can encourage customers to make a purchase sooner rather than later, potentially increasing the total value of their order.


Increasing AOV

Finding the right tactics for your eCommerce business will depend on your industry and customer base. Using a mix of the tactics outlined above is an effective way to increase your AOV, ultimately driving growth and profitability.

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