Increase the order value of your webshop? The average order value is the amount of the price of an average order in your webshop or store. In marketing terms, it is also called the AOV or Average Order Value . In this article I will explain how you can calculate this value, how you can increase the AOV and what this means for your marketing.
Calculate the average order value or order size
You can calculate the AOV by dividing the turnover of a certain period by the number of orders in that period. Let’s take a period of 1 year.
Suppose your webshop has made € 250,000 gross turnover, so including VAT and shipping costs. This required 1500 orders. Average order value is then 250000 / 1500 is € 166.67.
Increasing order value can be done in different ways
Increasing the average order value means that you generate more revenue from the same marketing effort. Your investment in marketing gets a higher return. Many webshop software nowadays has possibilities to make the order value higher. How do you go about this?
1. Create product bundles
A product bundle is a collection of products that are related to each other and where you get a discount if you order the collection in one go. For example, you can offer a computer with mouse and keyboard in one product or place bundles at the bottom of the detail page in your webshop. In your store you can also apply this by placing products together or placing them in 1 package, such as a basket or a box.
2. Show related products
A related product is a product that is in addition to the product that is shown. If the visitor of your webshop or store looks at a tablet, you can also place a tablet cover or connection cables nearby. In marketing terms, this is also called a cross-sell. People think ‘hey, this is also useful!’ and therefore place several products in the shopping cart.
With my webshop LifeDeals , related products are shown on the product pages and sometimes in the checkout page.
3. Show more expensive variants
It may be that your visitor is a professional user and has more requirements for his purchase. By showing more expensive variants with the product shown, you can send a visitor to choose a more expensive variant, which increases the average order value.
For example, a more expensive variant can also be a larger or more luxurious variant.
4. Apply scales for discount for larger purchases
If you buy 5, you pay 4. A scale is a larger purchase of the same product for which less is paid. Many webshop systems have a plugin that makes it possible to set scales per product.
5. Increase order value with a One-click-upsell
Relatively new is the one-click-upsell. This is a product that is added to the order after checkout without the visitor having to pay again. In the case of a one-click-upsell, a mandate is issued so that the webshop can debit the amount from the visitor’s bank account via direct debit. The OCU then uses the payment details of the settled order.
More and more payment providers, including Mollie, support the one-click-upsell.
Increase the average order value for your marketing
For online marketing I always use the maxim to 10% of the turnover excl. vat and shipping. Suppose your desired turnover is € 250.000,- excl. VAT and shipping then I use a maximum budget of about € 25,000 for customers,-.
Suppose you know with my tips to increase the AOV from € 166.67 above to € 200,-. You only need 1250 instead of 1500 orders. You can then spread the same marketing budget over fewer orders, leaving you with more marketing budget per order. This allows you to spend more money per order in, for example, Google Adwords or Facebook Ads, so that you are shown more often than the competition.
The more marketing budget per order, the better your view in paid channels and the faster the growth of your business!