As an eCommerce business owner or marketer, you face various challenges every day.
Increasing your AOV is a great way to boost revenue, gross profit, and add value to your customers.
It’s a helpful eCommerce metric for determining how much money your customers typically spend with you.
In this article, you will learn:
What AOV is and how to calculate it
Why AOV matters in eCommerce and to retailers
How email marketing, specifically, can improve your AOV
Examples of how to increase AOV with email marketing
What is average order value (AOV)?
Average order value is the average dollar amount spent per online customer order. This critical metric shows how your customers move through your buyer’s journey can help optimize your strategy and, as a result, increase your ROI.
How to calculate AOV
To calculate average order value, take the total revenue over a specific timeframe and divide it by the total number of orders within that same period.
For example, let’s say you want to calculate the AOV of the last month, which yielded $50,000 in revenue and 1,000 orders. When you divide $50,000 by 1,000, you get an AOV of $50.
Why average order value matters in eCommerce
Because average order value reveals part of your customers’ shopping behavior, you can make better decisions around your pricing strategy.
When you improve your pricing strategy, you increase your profit and revenue growth.
Average order value also helps balance your customer acquisition costs, meaning you can boost your ROI and reallocate those dollars into your marketing spend.
AOV also helps with other aspects of marketing aside from pricing. Let’s take a look!
Increased AOV = Increased Revenue
Increasing your average order value means generating more revenue per sale without reconfiguring your marketing budget.
For example, let’s say 100 customers add an extra $15 worth of products to their shopping carts. So instead of spending $50, they spend $75. An extra $15 per sale might not seem like much, but $15 multiplied by 100 customers is an extra $1,500 that wasn’t there before.
Plus, the jump from spending $50 to $75 might not be such a big deal to customers—only if the product carries that value.
It’s important to note that you don’t have to upsell expensive items to boost your AOV. The key is to know your audience and their spending limits.
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Reduce Marketing Costs
Increasing your average order value means boosting your bottom line without having to add other marketing tactics to the mix.
The key to increasing your AOV is to understand what products will tip customers to “add to cart.” If you know the buyer psychology behind how and why your customers shop, the opportunities are endless.
Email marketing is a great way to tap into that psychology and reach customers with the right message depending on their stage in the buyer’s funnel. Let’s dive in!
8 Ways to boost AOV through Email Marketing
Email is a powerful marketing channel for several reasons, a major one being that it’s a direct pathway to your customers.
Statista predicts that the number of email users will spike to 4.3 billion by 2023. What’s more, the average email marketing ROI for eCommerce per $1 spent is about $45, according to a HubSpot Research report.
That’s a lot of potential reach. Because of that, email marketing is an excellent way to increase average order value (AOV). Here are some of the most significant ways to leverage email marketing to increase your AOV:
Personalize your product recommendations
What’s better than getting an email full of personalized recommendations based on your shopping behavior? Not much, in our opinion.
Personalized emails not only make customers feel seen by brands, but it’s a smart way to nudge customers to checkout. SmarterHQ reports, 70% of millennials buy cell phone number list data get frustrated when brands send irrelevant emails. Also, 91% of customers say they’re more likely to shop with brands that provide relevant recommendations.
Personalization + the convenience of email = a major win-win.
Leverage existing relationships with audience segments
These days, customers rarely give out their email addresses to just any brand. So chances are, by having your customers’ email addresses, you have an existing relationship built on trust and interest. Or, are working your way towards one!
How you talk to customers varies from audience segment to audience segment. As a result, your emails will vary depending on who you’re targeting.
For example, if you want to increase AOV across your loyal customer segment, you might consider creating an email campaign around a new. 8 Ways to Boost Average Order Value + Examples exclusive product release or discount with purchase.
If you’re trying to increase AOV with first-time buyers, offering free shipping or a free gift with orders exceeding $X may work best.
Experiment with your marketing strategies
There’s no denying the versatility of email as a marketing cm lists channel. Brands can experiment with countless ways to reach their audience, making it the perfect platform to cross-sell. Measure, optimize, and repeat.
An email marketing platform like Sendlane offers multivariable segmentation—or the ability to segment your lists by customer behavior. 8 Ways to Boost Average Order Value + Examples Whether you want to create a campaign for customers who’ve made a purchase within the last 30 days or who have spent a specific dollar amount, it’s easy to create the perfect audience segment.
8 Ways to Boost Average Order Value + Examples This flexibility opens the doors for brands to test various campaigns, behaviors, messages, and more.
Bundle products that accompany one another
Communicating your products’ benefits and features is critical, but what about showcasing how your products are better together?
This tactic is an excellent way for customers to link other products rather than only focusing on an individual—better known as cross-selling.
5. Offer free shipping to subscribers who spend $X+
65% of customers research free shipping thresholds before adding items to their shopping cart, according to the National Retail Federation’s Consumer Review report. What’s more, 29% of shoppers have abandoned a purchase because two-day shipping wasn’t free.
