A frequent question among online vendors is “How can I increase my eCommerce conversion rates?”. It’s natural to wonder if your store’s sales have reached their maximum potential or if there are ways to improve them.
In general, techniques and tools that can generate revenue growth can be classified into three main groups according to their purpose:
- Increase the number of customers – this category covers all techniques that boost website traffic and turn visitors into customers.
- Increase the return of customers – This category covers all strategies that encourage customers to repeat purchases instead of exhausting their value in just one transaction.
- Increase the average value of the cart – AOV, also known as Average Order Value, is a technique that helps customers spend more on your website.
This article is focused on the last group. We will go over different ways of increasing the average order value in WooCommerce, which will ultimately lead to growth in your total revenue.
Table of contents
- The importance of increasing the average order value in WooCommerce
- What is the Average Order Value (AOV) and why is it important?
- Why is it important to control and increase the AOV?
- Examples of AOV increase in businesses
- Strategies to increase the AOV in WooCommerce
- Conclusions and next steps
The importance of increasing the average order value in WooCommerce
We’ve just mentioned three different methods to increase sales, but the reason why we’re highlighting AOV is that it’s a simple and effective way to boost revenue. It’s a no-brainer.
The other two methods are also important, persuading existing customers to spend more is usually easier than getting new ones. Moreover, certain products and services cannot be sold multiple times to the same customer, but upselling isusually possible.
While it’s still essential to find new customers, it’s wise to prioritize increasing the average order value since it will benefit both current and potential customers.
What is the Average Order Value (AOV) and why is it important?
First of all, let’s understand what AOV means before we discuss the techniques. AOV stands for Average Order Value and it can be calculated over different time frames. It’s important to know this to proceed with the discussion.
Usually, it’s recommended to track this for at least a month. However, it can be helpful to do a weekly analysis to see if there are any variations in the daily trends.
Calculating the AOV is a straightforward process. You just need to pick a time frame to analyze, add up the value of all orders received during that period, and then divide that value by the number of orders. It’s a piece of cake!
Let’s say that in March, Patrick’s shop had a total order value of $3000 with 150 orders placed. To calculate the average order value, Patrick just needs to divide 3000 by 150, which gives us a value of $20 per order.
It’s important to note that the term “average value” implies that some information may be missing. To ensure accuracy, it’s advised to analyze data over extended periods of time and with a larger sample size. This way, you can avoid any misleading values.
For example, let’s say you get five orders in a day, four of them are $5 each and one of them is $100. Despite most of the orders being on the lower end, the AOV comes out to be $24 per order.
Why is it important to control and increase the AOV?
Even though there may be some room for error in the average value, it’s still important to monitor your store’s AOV as it gives valuable insights into your store performance. So, it’s highly recommended to keep an eye on it.
However, it’s crucial to note that AOV shouldn’t be the only factor you focus on. Though it may seem attractive to use shortcuts to boost AOV, they may not necessarily lead to an increase in revenue.
Here’s a clear example: offering free shipping is a smart move to attract online shoppers and get a higher cart value, which we recommend as well. But, if the minimum purchase amount for free shipping is set too low, you might end up with a lower net revenue due to the cost of shipping.
It is essential to master the skill of continually controlling and comparing this tool across different periods to take advantage of its fullest potential.
Examples of AOV increase in businesses
The Swanky Agency sponsored a case study on an Australian store that showed how AOV could be increased with minor changes. By implementing certain shipping techniques, they were able to achieve a significant 32% increase in AOV.
Offering free and/or speedy shipping is an incredibly effective strategy for eCommerce businesses (we’ll explain how you can accomplish this with WooCommerce later on). Nowadays, customers are less patient and more hesitant to pay extra fees, particularly when it comes to shipping.
This case study showed that increasing the minimum spend for free fast delivery resulted in a noteworthy increase in AOV. That’s why we included the suggestion of setting minimum spend limits to offer free shipping in this guide.
Strategies to increase the AOV in WooCommerce
Let’s explore some effective strategies to increase the average order value on your website.
Volume discounts or combined purchases
In the past year, the official website of Panini and Planet Manga ran a promotion that allowed customers to collect golden plates of their favorite comic volumes. This promotion ended in early March 2023, so customers had to act fast to take advantage of it.
Customers had the opportunity to receive a plate every month if they made a purchase worth $75 or more in a single order. The reason for this offer was to benefit the customers.
Apart from advertising specific products with certain terms and conditions, this promotional approach effectively led to an increase in the average order value for a total of eight months.
In today’s competitive eCommerce scene, Amazon faces tough competition. As a result, it can be challenging for customers to make a single purchase of books and comics valued at $75.
By using the scarcity principle and creating limited-run unique plates, the website was able to appeal to the target audience’s passion for collecting. As a result, they successfully increased the average cart value through a cost-effective promotion.
The lesson here is that it’s very important to understand who your customers are and what they’re interested in in order to offer the right promotions or incentives that can help increase sales. This is a powerful marketing technique that should not be overlooked.
It would be a good idea to think about running a similar promotion on your eCommerce site. Wondering how?
How to achieve this?
To begin with, WooCommerce allows creating coupons with usage restrictions. For a similar approach, you can create a discount code that can only be applied if the cart value exceeds a specific threshold.
To do this, just go to Marketing > Coupons:
Next, click on “Add coupon” and you will be redirected to a new page where you will be able to enter the discount you want to offer (in our case, it’s $5):
To proceed, make sure to head over to the “Usage restriction” section and specify the minimum amount needed in the cart for the code to work, which is $50 in our case:
It’s crucial to let the customers know about the existence of the promotion once it’s created. This way they can make use of it while purchasing.
There are multiple ways to go about it (and it’s beneficial to explore all of them):
- You can inform your customers on social media.
- You can inform them on the site.
- You can send them the coupon code via email, creating an automated system based on their actions on the site.
If you want to keep your website visitors in the loop, try the WooCommerce Popup plugin. It lets you share details about ongoing promotions and other important updates, such as newsletter invitations. It’s a helpful way to stay in touch with your audience.
If you’re looking to set up a system for automated coupons, consider using the WooCommerce Coupon Email System. It lets you offer promotions based on your customers’ behavior, such as their last purchase or even for their birthday. It’s a great way to offer discounts and increase the average cart value.
Free shipping threshold
Offering free shipping is a great way to increase your website’s average order value. This approach is widely used by eCommerce stores, such as Amazon, to attract more customers.
Amazon customers are glad to pay for an annual subscription (Amazon Prime) to avoid shipping costs and get faster delivery.
Customers greatly appreciate free shipping, and you can use this to your advantage by offering it for orders above a certain amount. This will help increase the average cart value and keep customers happy.
This will encourage customers to shop more, because:
- People tend to avoid the extra costs.
- Some people believe that paying for shipping is a waste of money, but adding more items to the cart can bring advantages.
How to achieve this?
Luckily, with WooCommerce, it’s possible to set up free shipping and only display it when the cart value reaches a specific limit. Here’s a quick guide on how to make it happen.
To do this, just go to WooCommerce > Settings > Shipping:
In case you didn’t know, it’s important to set shipping zones in WooCommerce. You can select the zone that corresponds to your desired audience (such as the United States) and see all the shipping options that are available:
Select the free shipping option and click on “Edit”. You will be able to customize the conditions under which this shipping method is available:
To get free shipping, we’ve decided to set a minimum order amount. For this, we’ve selected the third option and entered the amount:
To integrate the discount code for free shipping along with the previous method, we just need to select the fourth option. It’s as simple as that.
Implementing these strategies alone won’t be enough to increase the average order value. It’s also important to inform customers about ongoing promotions. Apart from displaying it on different sections of the website, you can take advantage of some plugins like WooCommerce Popup or WooCommerce Cart Messages to notify customers about free shipping and other offers without disrupting their browsing experience.
Take advantage of cross-selling and upselling
Cross-selling and upselling are two very popular marketing techniques. But, what exactly are they?
When customers are interested in a particular product, the seller might suggest related items to increase the overall number of products in the shopping cart. For instance, if a customer is considering buying a camera, the seller may suggest additional items such as memory cards, carrying bags, secondary lenses, studio lights, and more — this is cross-selling.
On another hand, upselling involves recommending a superior and pricier product to customers or suggesting an additional item. For example, if a customer is checking an outdated smartphone, the seller may suggest a more modern and expensive version.
It’s no surprise that Amazon uses both of these methods, and it’s always a smart move to take cues from the industry leader.
How to achieve this?
Luckily, with WooCommerce, you have the opportunity to make use of a wide range of online marketing strategies such as cross-selling and upselling.
If you’re looking for a solution similar to Amazon’s, the WooCommerce Frequently Bought Together plugin is a great option to consider. It replicates its functionality nicely and comes highly recommended.
By suggesting related products to customers during their shopping experience, you can boost the overall value of their shopping cart:
One of the greatest benefits of this marketing approach is its subtle nature and its ability to be seen as a helpful service. In most cases, customers will need to purchase the extra products you recommend, resulting in a potential second sale.
The WooCommerce Added to Cart Popup can also come in handy for recommending additional products or encouraging upsells once a customer adds an item to their cart:
Your customers will see the suggestion like this:
Similar to cross-selling, there are other methods that aim to increase the average order value by encouraging customers to buy more products. In some stores, it’s common to offer product bundles at a discounted price. In the gaming industry, Humble Bundle is a popular platform with a large customer base that offers different products at attractive prices.
An effective strategy to increase the number of items in your customers’ shopping carts is to offer a limited discount on a selection of products.
How to achieve this?
With the YITH WooCommerce Product Bundles plugin, creating bundles on WooCommerce is a breeze. This plugin allows you to showcase the products in the bundle along with their prices, images, and descriptions.
Users can then easily add all items to their cart by clicking on a single button. This approach aligns with the concept of cross-selling:
Offer a loyalty program
We’ve observed that providing a reward can motivate customers to spend more in your store, and loyalty programs are a popular and effective marketing technique to achieve this. These programs are not only used in online stores but also in supermarkets and online casinos.
The method is quite simple: by providing incentives such as discounts, freebies, perks, etc. to the users who engage the most on the website, you can reinforce their loyalty and encourage them to make more profitable purchases.
It’s actually quite common to establish spending targets that, once achieved, offer customers a specific bonus as a reward.
With this approach, you can not only increase your AOV but also attract more customers to return for future purchases. This helps to build a dependable and long-term customer base.
How to achieve this?
If you’re looking to set up a loyalty program on WooCommerce, the WooCommerce Points and Rewards plugin is an easy solution. The plugin lets you establish a scoring system with typical loyalty program features like badges, levels, rewards, and even the option to trade points for discounts on future purchases.
It’s important to handle coupons and discounts with care to avoid affecting your profits. However, it’s hard to deny their power when it comes to achieving specific goals for your store.
Conclusions and next steps
In this guide, we’ve explored some practical examples to increase the average order value of your store. Remember, there are plenty of other options out there. All you need to do is find ways to encourage customers to make bigger purchases.
Thankfully, the versatility of WooCommerce makes it possible to use a wide range of marketing strategies, so it’s common for an online store built on this platform to outperform its competitors.
To achieve success, you just need to give a technique a shot and find the appropriate plugin.
What is AOV?
AOV stands for Average Order Value, and it refers to the average amount of money spent on each order in a particular store.
How is AOV calculated?
To figure out your AOV, simply divide your total earnings during a specific time period by the number of orders placed during that same period. For instance, if you earned $1000 and had 100 orders, your AOV would be $10. This calculation is quick and easy!
Why shouldn’t you rely only on AOV?
While AOV is a useful metric to monitor your store’s performance, it’s not always reliable when there are only a few orders. This is because a single high-value order can greatly increase the overall AOV and skew your perception of how well your store is doing. Additionally, having a high AOV doesn’t always result in increased revenue, especially if it’s achieved through excessive promotions and offers.
How to offer free shipping on WooCommerce?
Including free shipping as one of the shipping methods for each zone on your WooCommerce store is easy. Additionally, you have the option to display this choice only when the value of the cart reaches a specific amount.
How to avoid losing money with free shipping?
To solve this problem, you can consider a few options such as increasing the purchase cost or adding shipping charges to the prices of the products.
What is AOF?
The term AOF refers to Average Order Frequency, which represents the standard number of times your customers place an order. It’s crucial to have a high AOF as the majority of revenue in eCommerce comes from repeated purchases made by the same user.
What techniques can I use to increase AOV?
To increase sales, you can try cross-selling, upselling, bundling products together, offering discounts for purchases over a certain amount, providing free shipping, setting up loyalty programs, and other similar tactics.