How to Find and Improve Your Average Order Value

If there’s one stat you should know for your ecommerce store, it’s your average order value.

As an ecommerce store owner, you’re always looking for ways to increase your revenue. One way to do this is by determining and increasing your average order value (AOV). 

Generally, this metric determines how much customers spend per order in your store. Therefore increasing it, helps to increase the total revenue generated in your store. 

Do you know what your average order value is? What makes it so important to your business? What are the best ways of increasing it? All these questions are answered below 👇

Let’s start by understanding what an ecommerce average order value is. 

What is an ecommerce average order value?

Average order value, or AOV, measures the average amount of money customers spend per order in your ecommerce store over a given period. Essentially, it’s the average value of each order in your online store.

By looking at your AOV ecommerce metric, you can estimate the amount of money each of your customers is willing to part with for every order made. This estimate alone makes AOV an important metric because if it can be improved, it will directly affect your store’s revenue. 

For example, if you can convince your customers to add more items to their cart, or, buy more expensive items, then you’ll get them to spend more per sale. 

This way, your online business can generate more revenue without increasing the number of orders or customers coming to your store.

Figuring out the benchmark average order value for your store can also help you to:

• Measure the success of your marketing campaigns – for example. If you run a sale and your AOV goes up, you will know that the promotion successfully motivates your customers to spend more money.
• Identify your best-performing and least-performing product or services. Then choose the next cause of action. 

So now we know what an average order value is, we’ll walk you through a few steps to determine yours.

How to find/calculate your average order value

AOV is a fairly easy metric to calculate. To find it, you’ll only need two sets of data: the total amount of money spent and the total number of orders fulfilled over a given period, say a month. 

If you’re using WooCommerce on WordPress, you can get this data from the Reports section and export it to calculate the AOV using the formula below. 

Average order value = gross sales / total number of orders

Note: The AOV you calculate here is just an average, so, it can be affected by outlier orders that are significantly larger or smaller than the typical order. So bear that in mind.

To get an accurate measure of your AOV, you may want to calculate your AOV for a longer period of time, such as a year, or to exclude unusually large or small orders from your calculation.

Now we know what AOV is and how to find it let’s see how you can improve the AOV of your ecommerce store. 

How to improve your average order value

There are key areas of your ecommerce store that you can focus on to improve your average order value over time. In this section, we’ll discuss some of these areas and walk you through how to improve them.

Number 1: Use upselling and cross-selling

Upselling and cross-selling are techniques you can use to encourage your customers to purchase additional products or complementary products/services.

In cross-selling, you can offer your customer base another product to add to the one they’re already interested in. You can convince them to buy this additional product by showing them how it compliments the one they’ve added to their cart.

For instance, if a customer wants to purchase a sweatshirt, you can pitch a sweatpant and sneakers to complete the look. 

Alternatively, you can offer the customer a more expensive product than the one they have shown interest in. This is called upselling. Typically, the more expensive product is an upgrade with more features. For example, a higher tier plan for a software service with additional features. 

To make an upsell, you need to show the customer how the more expensive product fulfills their needs better than the one they’re interested in. 

Cross-sells and upsells boost revenue

While upsells serve to increase sales value (amount spent for a sale), cross-selling will improve your sales volume (number of items bought per sale). These are very useful techniques that improve revenue growth.

📈 In a HubSpot blog survey, more than 500 retailers reported that cross-selling and upselling are responsible for up to 30% of their revenue.

Because of the effectiveness of these techniques, ecommerce giants such as Amazon are using them to increase their AOV. 

How to add upsells and cross-sells to your ecommerce store

You can add upsells and cross-sells to your WooCommerce store using the Iconic Sales Booster for WooCommerce plugin. 

Sales Booster lets you cross-sell and upsell from when a customer shows interest in a given product to when they’ve completed their purchase.

It does this using tried and tested techniques such as: 

• Frequently bought together – add cross-sell/upsell products just below the ‘Add to Cart’ button on the product page. 
• Customers also bought – Add cross-sells/upsells after a customer adds a product to their cart. 
• Order bumps at checkout – Add cross-sells/upsells at checkout. 
• One-click cross-sells after checkout – Add a one-time offer after a customer completes a purchase. 

You can purchase Sales Booster from the Iconic store: iconicwp.com/sales-booster-for-woocommerce and install it on your WordPress website. 

Number 2: Offer product bundles

A product bundle is a collection of multiple products sold together as a packaged set, usually at a discount. 

To put this into context, we can use McDonald’s as an example. Instead of selling a soda, burger, and fries separately, they sell these items in a package or meal deal.

It’s a really useful technique to boost your average order value because customers will see the value in buying more items for a slightly reduced price, and you’ll sell more as a result.

Product bundles make it easier to buy multiple products

By bundling or grouping products together, you can offer customers a discount and make it easier for them to purchase multiple products simultaneously. The discount incentivizes them to opt for product bundles rather than single products. When they buy bundled products rather than single ones, it helps to boost your store’s AOV. 

📈 According to Shopify, product bundles account for 10 to 30% of e-commerce revenue. So if you set up product bundling in your store, it can boost your revenue too. 

Note: Product bundling can also help you to save on shipping costs because you will have fewer packages to deliver.

How to add bundled products to your online store

You can add bundled products to your WooCommerce store using the WooCommerce Bundled Products plugin.

WooCommerce Bundled Products allows you to bundle any type of product together on a single product page. This could be simple, virtual, variable, or any other type. You can allow customers to add each individual item in the bundle or add the whole bundle to their carts. This way, they can create their own combinations. 

WooCommerce Bundled Products lets you add irresistible discounts and choose how the prices will be displayed to make your bundled products more appealing. 

To add product bundles to your ecommerce business, you can purchase WooCommerce Bundled Products from Iconic: iconicwp.com/woocommerce-bundled-products, then install it on your WordPress website.

Then follow these steps to add product bundles:

1. Go to Product > Add product to create a new WooCommerce product and give it a title and description.
2. Add a product image as you would normally.
3. Select Bundled Product from the product type dropdown menu in the Product Data Section.
4. Under Product Data, there’ll be a new tab called Bundled Products. You can choose products to add and display your bundle product price.

Number 3: Improve your checkout

Your checkout page is where your customer completes their order and money exchanges hands. So, ideally, you want this process to be as quick as possible, streamlined, and without any distractions.

You wouldn’t want your customers to encounter a complex or confusing checkout when they want to complete their purchase. This can cause them to abandon their carts at checkout.

📈 The Baymard Institute reports that 17% of your customers will abandon their carts if the checkout process is too long or complicated.

If you optimize your checkout, customers can complete their purchases smoothly. This can boost your conversion rate and hence your store’s AOV. You can create a distraction-free checkout that is easy to follow to avoid frustrating the customers. 

Nike has a simple but impactful checkout flow. It has a modern design that is relatively easy to follow. In addition, it allows customers to complete a purchase without creating an account. 

How to improve your checkout page for an improved average order value

You can improve your WooCommerce checkout using the Flux Checkout for WooCommerce plugin. 

Flux Checkout allows you to eliminate nearly all the reasons why customers would abandon carts in your store by:

• Replacing the bulky WooCommerce checkout with a multi-step checkout that customers can easily follow. 
• Save your customers time by automatically filling in address fields for them.
• Limiting distractions at the checkout by only displaying the necessary fields at each step. 
• Introduce a smooth multi-step guest checkout. 
• Customize the order confirmation page to inspire loyalty in your customers. 

By allowing you to implement all of the above, Flux Checkout helps to provide a seamless and concise checkout that customers can complete easily. This helps reduce cart abandonment, allowing your store more conversions.  

To do all the above, you’ll have to purchase Flux Checkout from Iconic: iconicwp.com/flux-checkout-for-woocommerce and install it on your WordPress website. Here is a step-by-step guide on how to do this. 

After you’ve installed Flux, you can now optimize your checkout in the following ways: 

• Choose between a classic and modern design
• Customize your checkout style
• Customize the order confirmation page. 

Number 4: Include volume discounts and incentives for customer loyalty

Volume discounts entail offering price reductions to customers who buy large quantities of a single product. These discounts incentivize customers to buy in bulk and improve customer retention.

Volume discounts encourage bulk purchases

You can use volume discounts to encourage customers to buy your products in large quantities as a seller. This helps increase the average order value as more customers buy in bulk, making them eligible for these discounts. 

📈 Volume discounts are highly effective because research shows that up to 30% of customers buy products to gain something. And in this case, volume discounts make them feel like they’ve got a good deal.  

Other incentives such as coupon codes, reward points, loyalty programs, or exclusive deals help to prompt customers to buy more goods. As a bonus, these discounts also help with customer loyalty and improve your customer lifetime value. 

Number 5: Include product add-ons

Product add-ons are additional products or services that can be bought together with the main product. This can be a product, such as additional pepperoni on a pizza, a service, or an assembly/installation of some technical equipment. 

Product add-ons allow the customer to buy additional products to the main product. If they do, it increases the value of the order. Since product add-ons add value to the primary product, customers will be willing to spend on them.

Let’s say a customer buys a TV. You can offer wall mounting as an add-on service. The customer will be willing to spend on this service since wall mounting saves space and eliminated cable clutter in the living room. 

Pizza Hut allows product add-ons for their pizzas, for example, extra mozzarella, jalapeno peppers, or pepperoni, to add to the pizzas that customers order. 

How to add product add-ons to your ecommerce store

Product add-ons are extremely useful in increasing your store’s AOV. You can add them to your WooCommerce store using the Orderable plugin. 

Orderable is an online ordering solution for WordPress with product add-ons as one of its best features. With Orderable, you can create any product add-on and display it anywhere on your website. This includes the product page.

It allows you to display the options as radio buttons and checkboxes which customers can select. It also allows you to add image thumbnails to make the product add-ons more visually appealing. 

You can add product add-ons to your WooCommerce store in two simple steps: 

1. Install Orderable Pro – You can purchase it here: orderable.com, then install it on your WordPress website. 
2. Set up product add-ons.   

Number 6: Work on your pricing strategy

Apart from offering different discounts, you can closely examine your pricing strategy and make adjustments to increase your AOV. You can slightly increase the prices of popular products differently and observe the response. 

These minimal price increases can significantly improve your AOV if done for multiple products. We recommend looking at competitor prices to see where you can make adjustments. You can also find ways to add more value to your products without impacting your profit margins – allowing you to raise your prices slightly to increase your AOV.

📈 But, you have to be extremely careful here, as 60% of customers consider pricing as the initial criteria for a purchase decision. 

When working on your pricing strategies, you should look at other factors impacting your AOV, like shipping costs. Here, you can offer free or discounted shipping to encourage your customers to add more items to their shopping cart and consequently increase the average order value for your business.

At the same time, you can move your free shipping threshold to require customers to spend a certain amount and make a minimum purchase before they’re eligible for free shipping.

Number 7: Include product recommendations

Another way to encourage higher AOV is by using product recommendations. While upsells and cross-sells also recommend products to customers depending on what is in their carts, product recommendations are less dependent on this and more personalized in real-time. 

It uses a customer’s browsing and purchase history to suggest similar or related products that customers may be interested in. You can apply this strategy to help your customers discover new products that may interest them. 

📈 In purchases where the product recommendation is clicked, the AOV will increase by 10%, according to Invesp.

If you include product recommendations in your ecommerce store, you’ll not only help your customers discover new items they may not have otherwise considered, but also increase your sales.

📈 After all, 35% of the revenue generated by Amazon comes from its personalized product recommendations. This is how brilliant this strategy is.

Number 8: Make expensive products more appealing

Every store has expensive products and for a good reason, but making these more appealing to customers requires a little more work. 

The best way to make expensive products appealing is by highlighting the value and benefits of these products to potential customers. This will often involve showcasing the products’ high-quality materials or unique features or emphasizing how best they can fulfill the customers’ needs.

📈 According to a study conducted by Insider Intelligence, 32.4% responded that quality is the primary factor to justify an item’s cost. 

If you create a trusted brand, more customers will prefer to buy from you, regardless of price.

📈46% of customers prefer to buy from a trusted brand.

By making expensive products more appealing, customers will spend more on them, increasing your AOV.

Apple products are expensive because the manufacturers go out of their way to provide quality devices. Once a new iPhone comes out, Apple has a release announcement that showcases all the new features that justify the price. 

How to make expensive products more appealing

You can implement several ways to improve the product page for your expensive products. These include:

• Improving on your product description – The product description should clearly and concisely explain the benefits and features of the product, highlighting why it is worth the higher price.
• Using better images for your product – You can use high-quality images to showcase the product and make it more appealing. These can include product images from different angles and close-up shots of unique features or details. Better yet, add a video to your product page for an even better result.
• Focusing on the product’s unique selling points – You can emphasize your product’s unique selling points in product descriptions and marketing materials. This can include its quality, durability, or any unique features or benefits it offers.
• Highlighting customer testimonials, reviews, and user-generated content – Including social proof on the product page can help to build trust and show potential customers that others have had positive experiences with the product.

You can also focus more on digital marketing efforts for your expensive product. Create targeted ads and promotions for this product. Engage with potential customers on social media platforms or get influences within your niche to promote your expensive products. This will impact your sales more and give you a better customer acquisition cost than selling a cheaper product.

👋 Want to learn about the 4 other ecommerce metrics you should be focusing on this year? Check out our ecommerce metrics post.

Improve your average order value today

Your average order value tells you how much customers spend per order in your store over a given period. Increasing the AOV will help your store generate more revenue from larger sales. 

Implementing the above methods to improve your store’s AOV, might seem like a lot of work. But, you can complete them quickly and easily using the plugins mentioned in this guide. 

You can easily get all of them (except Orderable) in a single purchase via our All Access Club. 

Or buy them individually here: 

• Iconic Sales Booster for WooCommerce – cross-sell and upsell throughout your customer’s journey in your WooCommerce store. 
• WooCommerce Bundled Products – create irresistible product bundles and discount prices for your WooCommerce store.
• Flux Checkout for WooCommerce –replace the default WooCommerce checkout with a smooth and easy-to-follow multi-step checkout.
• Orderable – include product add-ons, use order bumps when your customers add items to their carts and add tip prompts to your checkout to increase your average order value.