What is average order value? Why online sellers need to track AOV
If you are an online seller, then you know that tracking and understanding your average order value (AOV) is critical to your success. This number represents the average amount of money that each customer spends on your products. By keeping an eye on your AOV, you can determine whether or not you are making enough profit on each sale and adjust your pricing strategy accordingly. In this blog post, we will explain what average order value is and how to track it in detail. We will also share some tips on how to increase your AOV and boost your business profits. Thanks for reading! What is Average Order Value? Average order value (AOV) is an eCommerce index that calculates the average sum of all orders placed with a merchant during a specific time period. AOV is a critical indicator for online retailers to understand since it influences important company choices such as advertising expenditure, store layout, and product price. How to calculate AOV AOV is calculated by dividing revenue by the number of orders: Revenue ___________ = Average Order Value Number of orders AOV is calculated using sales per order rather than sales per client. Even though a single consumer might buy something more than once, each order would be taken into account independently for calculating AOV. AOV provides information about how those numbers are calculated but does not reflect the gross profit or profit margins. There is a significant chance to enhance positioning and marketing efforts for the more expensive items, provided they have larger margins. Online firms may improve their AOV and boost their ROI and ROAS across all marketing initiatives. The higher your AOV, the more you are making from each customer and, consequently, from each dollar spent acquiring them. More metrics when evaluating AOV Along with this strategy, the following two indicators are crucial to take into account: How to improve average order value Although it’s helpful to know what the average order value is, it’s not the only technique to compute an average. For instance, depending on their past purchases, a store can divide its consumers into various groups. Many businesses divide their customer base into thirds (Low, Medium, and High Spenders), but it’s also feasible to divide them into groups according to how frequently they place orders, the kinds of goods they buy, or any other criteria that makes sense for the business. Customers can be segmented and then targeted with advertising that is specific to their group. Low spenders can be targeted with incentives and cross-sell in an effort to increase their value, while high spenders and frequent customers can be enrolled in a loyalty program that rewards them. Additional ways to increase average order value include: In Conclusion, Average order value is a key metric for online sellers to track because it can give you an idea of how much money customers are spending on your products. By understanding your average order value, you can begin to make changes and optimizations to your sales process that will increase the number of money customers are spending on your products. One tool that can help you with this is OrderBooster – a simple product recommendation app on BigCommerce that helps online sellers cross-sell and upsell their products. With OrderBooster, you can see what items are being recommended to customers and adjust your recommendations accordingly. Use OrderBooster today to increase your average order value and drive more sales! Related services: System integration, Workflow management, Integration platform.
Upselling Meaning and Examples for BigCommerce
Upselling is a powerful sales technique that can significantly boost revenue for eCommerce businesses. By encouraging customers to purchase a more expensive or upgraded version of a product they’re already interested in, merchants can increase the average order value and drive higher profits. Let’s explore the upselling meaning, explain why it’s an important strategy for BigCommerce sellers, and provide real-world examples of effective upselling in action. What is upselling meaning? Upselling is a sales and marketing strategy designed to persuade customers to buy a pricier item. When employing upselling, you often highlight more costly products, profitable services, bundles, or package deals. To illustrate the upselling meaning, if you’re a mobile phone retailer and a customer is checking out with an entry-level phone, you might suggest an upgrade to a mid-range or premium model, thereby boosting your average order value. Upselling vs. cross-selling Upselling and cross-selling are both valuable sales techniques that businesses can leverage to increase revenue, but they operate in slightly different ways. Upselling focuses on convincing customers to purchase a more expensive version of a product or service, whereas cross-selling encourages them to add related or complementary items to their existing purchase. To illustrate the difference, consider the example of a computer sales business. In an upselling scenario, the salesperson would aim to steer the customer away from the mid-tier laptop they were initially considering and toward a top-of-the-line model with cutting-edge specifications. On the other hand, a cross-selling approach would involve the same salesperson encouraging the customer to purchase the mid-tier laptop, along with additional accessories that enhance the user experience, such as a protective case, a wireless mouse, or other complementary peripherals. Upselling examples Take a look at standout examples of upselling meaning that can inspire your approach for this sales strategy! Showcase featured products This technique is particularly useful for new online stores that may not have extensive customer browsing data yet. By highlighting your best-selling items or personal favorite products on your homepage and category pages, you can encourage customers to consider upgrading their selections to higher-priced options. Draw attention to your new arrivals Promoting fresh inventory that your repeat customers haven’t seen yet can be an excellent way to capture their interest and drive additional sales. eCommerce businesses often find great success with this approach, as customers are typically excited to discover new products they haven’t had the chance to explore previously. Leverage seasonal trends Promoting relevant seasonal merchandise on your homepage allows you to capitalize on customer interest in timely offerings. To enhance the effectiveness of these seasonal displays, consider pairing them with special promotions or discounts, which can further incentivize customers to upgrade their purchases. Generate daily offers These time-sensitive offers have a way of grabbing the attention of returning visitors and creating a sense of urgency that encourages immediate purchases. When crafting your daily deals, be sure to review your sales data to select the most profitable seasonal items to feature, such as popular sweaters during the colder months or top-selling outdoor gear during the summer season. Promote your best selling items To identify your best selling items, you can analyze various data points, such as the number of times a particular product is sold, the number of visits to a specific product page, and the frequency with which customers add certain items to their carts. Your cart page is an excellent place to highlight these top-performing products. When visitors are reviewing their order, they can easily spot and add your most popular items to their purchase, further increasing the value of each transaction. Offer similar products or alternate options This solution is typically implemented on your product pages, allowing visitors to compare their options and feel confident that they are making the right choice. You can get creative with the labeling for these “similar products” modules, making them more eye-catching and unique to capture your customers’ attention. Display products other customers have viewed Promoting products that other customers have viewed is also one of the most effective forms when it comes to upselling meaning. People are more likely to buy items that have generated interest among their peers, so this approach can be a powerful tool for driving additional sales through upselling. Highlight customer reviews Highlighting items with glowing feedback can help spike their popularity and convince visitors to invest in higher-priced, better-rated options. If you have a few premium products that have garnered amazing reviews, those could be an excellent starting point for your upselling efforts. Recommend products in a “mini cart” These mini carts provide customers with a convenient way to view their current order without navigating all the way to the checkout page. By suggesting relevant add-ons or complementary items in this mini cart, you can make it effortless for shoppers to expand their purchases. Offer an upgrade Many eCommerce businesses also find success with upselling by offering an upgraded version of a product. To identify the best opportunities for these types of upsells, review your sales data from repeat buyers. Look for products that consistently sell well or upgrades that pack in significant additional value. By presenting customers with a compelling upgrade option, you can encourage them to invest in a more premium offering. Best practices for upselling Upselling can be a powerful tool for generating additional income when implemented thoughtfully and strategically. Here are some best practices to keep in mind if you want to understand upselling meaning: How to Achieve Effective Upselling with Atom8 The BigCommerce Automation app empowers you to streamline your sales efforts and boost revenue through effective upselling strategies. By leveraging the platform’s automation features, you can segment customers based on their behaviors, such as top buyers and new customers, to deliver personalized sales campaigns. Additionally, you can group your products and create custom pricing rules and promotions for different product tiers, making it easier to incentivize customers to upgrade. You can also utilize re-engagement emails to follow up with quiet buyers, recapturing lost sales opportunities and driving additional
Understanding eCommerce sales techniques
Are you looking to improve your eCommerce sales? If so, you’re in luck! In this blog post, we will be discussing four effective sales techniques that you can use to boost your online sales. Stay tuned – you don’t want to miss out on this valuable information! Launch automatic email marketing campaigns You must have a proper email marketing strategy in place if you want your email list to increase your eCommerce sales. Start with a straightforward sequence that includes a welcome email and a weekly newsletter with updates, promotions, or deals. As time passes and your subscriber base increases, you might want to start making your newsletter more significant. As you begin adjusting your strategy, be aware of all newsletter best practices as this will help you increase eCommerce sales. Display customer reviews in prominent areas Reviews serve as a form of social proof in a harsh internet environment. In actuality, 87% of consumers now consult reviews before deciding to purchase from a local merchant, up from 67% in 2010. Additionally, product pages with incorporated user evaluations convert at a rate that is 3.5 times greater than those without. Increased customer trust can be achieved by prominently displaying reviews on product pages, menus, and checkout areas. Recover abandoned carts with emails For eCommerce companies, abandoned carts are a major problem. Just under 70% of customers abandon their carts on average, which means that just 3 out of 10 will actually buy your product. However, not all is lost. You may increase eCommerce sales by attracting those visitors back to your website with a cart abandonment email campaign. Abandonment emails could instruct you on how to develop eCommerce businesses properly. Use product demonstration videos High-quality product photos are the industry standard in contemporary eCommerce. However, videos are not. This offers the ideal way to stand out without having to spend a fortune. Video product demos are a great option if you’re searching for a low-cost way to expand your eCommerce business. Unlike static photos, high-quality clips can be used to explore things or show them being used in a perfect setting. Provide more product suggestions Visitors will explore further into your website and frequently add more items to their cart if you display comparable products beneath your product page. Showcasing your available product options is essential if you’re seeking a simple strategy to increase eCommerce sales. Include live chat with your store Customers will always favor live chat because of its efficiency and quickness over emails and phone conversations, yet both have their uses. With a 73% customer satisfaction rating, live chat is the customer assistance channel that delivers the best results. Live chat is the most popular means of contact, which makes it the best choice for your eCommerce platform. You can improve client communication without spending a fortune by including a live chat feature on your website. Make the checkout process easier More than 18% of shoppers abandoned their carts in 2021 as a result of a problematic checkout experience. Cart abandonment risks increase with the length and complexity of your pipeline. What you should do to simplify the checkout process is easy: In Conclusion, While it’s impossible to cover every possible eCommerce sales technique in a single blog post, we hope that the examples and tips we have shared will help you get started. Keep in mind that there is no one-size-fits-all approach when it comes to selling online; what works for one business may not work for another. But by experimenting with different techniques and using tools like OrderBooster – which makes product recommendations based on customer behavior – you can find the strategies that work best for your own eCommerce store. Have you tried any of these techniques? What has been your experience? Let us know in the comments below! Related services: System integration, Workflow management, Integration platform.
