AOV | The Blog Pros

March 7, 2024

14 Ways to Increase Average Order Value With WordPress

Are you looking for ways to encourage customers to spend more money in your online store? You should immediately start tracking the average order value (AOV) metric.

Focusing on AOV is an effective way to grow a business, especially if you are running an eCommerce store. While working closely with numerous online stores over the last decade, I have tested a ton of strategies to see what increases AOV and what doesn’t.

From this experience, I can show you 14 ways that are sure to increase average order value with WordPress to improve your bottom line.

Note: This is a guest post by Chris Klosowski, the president of Easy Digital Downloads, the best digital eCommerce plugin for WordPress. This is an expert column that we publish every other Thursday, where we invite a WordPress expert to share their experiences with our readers.

Ways to Increase Average Order Value With WordPress

What Is Average Order Value (AOV)?

Running an online store is all about meeting the needs of your customers while covering your costs and making a profit. Luckily, there are quite a few ways you can increase your bottom line.

For example, you can try to increase the amount of traffic coming to your website or encourage more of your visitors to make a purchase. This will increase the number of conversions or transactions in your store, leading to more revenue.

A different approach is to try to increase the amount of money you make from each individual transaction. This is known as ‘average order value’ or AOV and is the topic of this article.

AOV is all about how much your customers are spending per order. You can calculate it by dividing your total revenue by the number of orders you received.

Here’s the formula for calculating AOV:

AOV = Total Revenue / Number of Orders

For example, let’s say your online store generated a total revenue of $10,000 from 200 orders in a month. Your AOV would be:

AOV = $10,000 / 200 orders = $50 per order

Understanding and analyzing your AOV can help you gain valuable insights into your eCommerce business. You can then use these insights to make data-driven decisions that improve your profitability and overall success.

Overall, if you sell multiple digital products, then focusing on increasing your average order value can be an easy way to grow your business.

With that being said, to increase your store’s average order value, you simply need to give your customers a reason to spend more.

Let’s take a look at 14 ways you can increase average order value with WordPress.

1. Track the Average Order Value (AOV) Metric on Your Online Store

Your first step is to start tracking AOV on your WordPress website. You can use this data to learn which strategies are working and which aren’t.

My team makes this simple in Easy Digital Downloads by offering built-in reporting so that you don’t have to set up separate tracking software and analytics solutions. All you have to do is go to Downloads » Reports in your WordPress dashboard.

WooCommerce also lets you easily find AOV within their dashboard.

For eCommerce tracking, I highly recommend setting up eCommerce tracking using Google Analytics on your WordPress site.

2. Get Your Pricing Structure Right

Finding the right pricing structure for your products is crucial. It needs to cover your costs and let you make a profit while also offering fair prices that encourage customers to make a purchase.

There’s a lot to consider here. So, my team created a detailed guide on the Easy Digital Downloads blog that will help you structure your digital product pricing for success.

Optimizing your pricing structure may involve some experimentation. Sometimes, you might find that lowering your price raises your AOV because it makes it easier for your customers to purchase more products.

But you won’t know what is working if you don’t measure it. Tracking your store’s AOV metric is a great way to discover what is working and what isn’t.

3. Offer Product Bundles

When considering the pricing structure of your store, don’t limit your thinking to individual products. Bundling different combinations of products can help your customers feel they are getting extra value.

In my last expert column, I mentioned that product bundling makes it easier for customers to make a purchasing decision. Better still, it can encourage them to purchase more, increasing your average order value.

For example, one of our customers, SmashBalloon successfully uses bundling to encourage their customers to try their products in a bundle for a heavily discounted price.

Bundles offer your customers a bulk discount that typically costs 60-80% of the total value of those products. The right combinations of products will cater to the user’s tastes, needs, and budget.

For instance, you could bundle products that are often purchased together. A gaming store might bundle a console together with a game and controller, or you could bundle an eBook with its audiobook version.

Bundles can also encourage customers to purchase more products than they were planning. Someone who just wants to purchase a few stock photos of home offices may be tempted by an affordable ‘Home Office Bundle’.

4. Offer Payment Plans

Sometimes, your customers can only make a small purchase simply because they don’t have enough money to buy more right now.

’Buy Now Pay Later’ payment plans allow users to make the purchase now and pay for it over time. At the same time, your store will receive the full amount right away.

Currently, 35% of consumers use pay-later plans for most of their purchases.

Because they make it easier for your customers to make a purchase, these plans help improve conversions and your store’s AOV.

If you’re selling digital downloads, you can use payment options like Klarna and Afterpay to set up Buy Now Pay Later with Easy Digital Downloads. Alternatively, you could use the WP Simple Pay plugin to offer a pay-later payment option with other eCommerce solutions.

5. Make It Easy to Check Out

A lengthy or confusing checkout process can overwhelm customers, meaning they spend less time and effort on their purchases or even quit before completing the payment. An easy checkout process encourages customers to spend more.

Simplifying the process reduces the cognitive load on customers by reducing the amount of brainpower needed. It lets buyers focus on completing the purchase without feeling overwhelmed, which may lead to them adding more items to their cart.

You can reduce friction by offering multiple payment options in various currencies, allowing your customers to check out as guests without needing to create an account, and including clear instructions.

EDD includes these options on its fast-loading checkout page. You can choose an extension to add the payment methods you wish to use, including Stripe, PayPal, and many others.

The Easy Digital Downloads Checkout Form

You can also customize the checkout page in WooCommerce and other eCommerce plugins to optimize it for conversions and increased AOV.

6. Offer Upsells and Cross-Sells

In my experience, one of the most effective ways to encourage customers to spend more money when making a purchase is using order bumps. This is when you offer the buyer extra products or deals during checkout.

Industry reports estimate that order bumps contribute to 35% of Amazon’s total revenue. They do it well, and it pays off.

Take a look at a screenshot of how a WordPress theme company can upsell a related product.

The main types of order bumps are upsells and cross-sells. Here are some examples to help you see the difference:

In a paint shop, an upsell would be to encourage a customer to buy UV-resistant paint instead of normal paint. It costs more initially, but lasts much longer, offering better value and saving money in the long term.
A cross-sell would be to offer the customer other products they will need while painting their house. These might include paint brushes, rollers, drop sheets, paint trays, and more.

This is simply good customer service. You are making sure the customer purchases the product they actually need, and they have everything they require to do the job. They appreciate it.

It also helps you increase the visibility of products that aren’t purchased frequently. And because the customer spends more money on the order, it increases your AOV.

It’s easy to add order bumps to your online store using the Easy Digital Downloads cross-sell and upsell extension, which is available for paid members.

It lets you add other digital products to your product pages and checkout page. This can generate some impulse purchases, allowing you to boost the average order value.

This is also super easy to set up in WooCommerce stores with a plugin like FunnelKit. For more details, just see the WPBeginner guide on how to create an order bump for WooCommerce.

7. Promote Products With High Margins

While you are recommending products to your customers, it helps to showcase and promote items with higher profit margins.

Compared to your other products, high-margin products will generate more profit per unit sold.

By promoting them strategically, you can increase your overall profit even if the sales volume remains the same or even decreases slightly. This can lead to a higher AOV without requiring an increase in the number of orders.

If you have a digital product store, then you can use the EDD Recommended Products extension to prominently display your high-margin products on your downloads and checkout pages.

Amazon does something like this on its product pages by displaying ‘People who viewed this also viewed’ and ‘People who bought this also bought’ recommendations. These can encourage customers to purchase additional products they are interested in.

Amazon Recommends Products on Its Product Pages

Another approach is to bundle high-margin products with related lower-margin ones. This can incentivize customers to purchase the bundle and potentially increase their overall spending.

8. Offer Smart Coupons

Smart coupons are a great way to get more sales, keep your customers happy, and encourage brand loyalty. They can motivate your customers to add more items to their cart so that they qualify for a discount.

For example, you could encourage customers to spend more by offering a free gift or free shipping when their cart total reaches a certain amount.

Or you can create ‘buy one get one’ (BOGO) coupons to convince shoppers to add more items to their cart. Or when they buy a certain item, you can offer them a second item at a discounted price instead of free.

Offer Additional Products at a Reduced Rate to Encourage Buying

The EDD Discounts Pro extension lets you create advanced discounts that are automatically applied to the checkout screen based on specific conditions.

Alternatively, if you have a WooCommerce store, then you can create smart coupons with the Advanced Coupons plugin. It lets you create all kinds of coupons, rewards, and discounts to get more sales and grow your business.

9. Optimize the User Journey

I have already touched on improving the checkout experience in your online store, but there are plenty of other ways you can optimize the user journey to improve customer experience.

A smooth and positive customer journey fosters a sense of trust and satisfaction. This can encourage customers to spend more and return for future purchases.

FunnelKit, formerly WooFunnels, is a WordPress sales funnel builder that lets you optimize the path users take on your website to become customers. It lets you improve your checkout, offer one-click upsells, use beautiful page layouts, and much more.

Customers have a positive experience on a website that’s easy to navigate and find the products they need. This helps them feel more confident about their purchases and complete larger orders.

10. Use of the Fear of Missing Out (FOMO) to Create Urgency

Creating a sense of urgency and excitement can encourage customers to purchase immediately to avoid missing out on a valuable opportunity. This is known as FOMO, or the fear of missing out, and is a well-known sales tactic.

When using FOMO strategies, you need to be genuine and transparent. If your customers sense that you are trying to manipulate them by creating a false sense of urgency, then you may lose their trust.

Urgency is typically created by running a limited-time holiday sale, such as on Black Friday. The customer needs to make a purchase before the sale is over to get the discount.

When running a limited-time discount, I recommend displaying a countdown timer to make sure customers act before the offer expires.

Scarcity is another way to create a sense of urgency. For example, you can inform customers when stock is low or offer exclusive limited edition products.

11. Use Social Proof to Earn Trust

New customers may be reluctant to spend much money in your online store. They simply don’t have a reason to trust you yet.

In fact, 92% of consumers are hesitant to make a purchase when there are no customer reviews available.

This is the power of social proof, where potential customers can be strongly influenced by the experiences of people who already made a purchase and had a good experience with your store.

This means that you can earn the trust of new customers by displaying product reviews and testimonials on your website from genuine customers. Once you gain the trust of new visitors, they will be much more confident about adding items to their carts.

EDD users can do this using the Reviews extension. This lets you enable customer reviews with star ratings on the products you choose.

Alternatively, you can use other leading WordPress social proof plugins like Smash Balloon Reviews Feed Pro and TrustPulse.

12. Create Loyalty Programs

Many of my customers successfully use loyalty programs to encourage shoppers to spend more. When you award extra points for orders over a certain amount, you can increase the average order value just as effectively as cross-selling and upselling.

Think of a Starbucks Rewards card. Every time you buy a drink, you are closer to a free coffee.

EDD offers several extensions that can help you create a loyalty program, such as the Purchase Rewards extension.

This lets you reward customers with a discount code after making a purchase. You can set a minimum purchase amount that will encourage them to add more to their cart.

On the other hand, WooCommerce users can easily create a loyalty program with the Advanced Coupons Loyalty Program plugin.

13. Recover Abandoned Carts

Most online stores have huge numbers of users leaving their sites from the checkout page. On average, a massive 69% of shoppers are abandoning their carts. Why not try to get some of them back and recover those lost sales?

These customers showed genuine interest in your products, which makes them valuable leads. Remind them of their abandoned cart and offer some incentives to complete the purchase. You might successfully convert them into paying customers, and this can contribute to your AOV.

You may be able to catch them just before they leave your site. OptinMonster’s exit-intent technology studies mouse movements to know when someone is about to leave your site, and shows a popup at that exact moment.

If an abandoning visitor has already left your site, then you can send them a push notification using PushEngage. Or you can send an automated email using EDD’s Recapture extension to regain their attention.

You can offer the customers an incentive to complete the purchase and present them with relevant upsell or cross-sell options, such as adding complementary products to their cart or offering a bundle discount. This is particularly effective if you use a personalized approach.

These targeted suggestions can encourage them to spend more, potentially increasing the overall order value.

For more details, you can see these guides on how to reduce cart abandonment in WordPress and how to send abandoned cart emails.

14. Test Multiple Strategies

Now that you’ve seen my list of ways to increase your store’s AOV, you can get to work and start testing multiple strategies.

But don’t try them all at once.

It’s better to make one change at a time and measure the effect it has on the value of your orders. This will let you see which approaches work and which don’t so that you can make data-driven decisions for your business.

Remember, increasing AOV is an ongoing process. By using a combination of these strategies and continuously monitoring and analyzing the results, you can effectively raise your average order value and boost the overall revenue in your online store.

I hope these tips help you grow your online business by increasing the average order value (AOV) in your store. You may also want to see these guides on how to create a landing page with WordPress or the best WordPress giveaway and contest plugins.

If you liked this article, then please subscribe to our YouTube Channel for WordPress video tutorials. You can also find us on Twitter and Facebook.

The post 14 Ways to Increase Average Order Value With WordPress first appeared on WPBeginner.

December 27, 2018

How to Increase Average Order Values With Product Bundling

Every business needs to strive for growth.

This isn’t a secret. However, many business owners hear growth and they jump to customer acquisition strategies, new product launches, and ways to increase their conversion rates.

All of these tactics are great for your company growth. But, they’re not the only way to boost revenue and grow your business.

You can also grow when you make more money with your existing products, services, and conversion rates simply by increasing your average order value.

Are you currently tracking this metric? It’s easy to calculate with this formula.

How to calculate your Average Order Value (AOV)

In order to increase your AOV, you need to encourage your customers to spend more in each transaction. Sounds great in theory. We’ll walk you through how to actually accomplish it.

There are tons of ways to get your current customers to spend more each time they shop. One of the best methods for increasing AOV is with product bundling. This marketing tactic employs a combination of upsells, cross-sells, and discounts. It also helps you generate more profit by focusing on your pricing strategy.

Basically, the psychology behind product bundling entices people to spend more with every transaction simply by buying more things at once. As a result, your average order value will rise.

Whether you sell products or services, your company can benefit from a product bundling strategy. But it’s not as simple as lumping any two or three random items together. In fact, that can do more harm than good.

If you’ve never done this before it can be a bit of a challenge to determine which products should be bundled together and how to showcase those options to your customers. So use this guide as a blueprint for increasing your average order value. Here’s what you need to know.

Don’t pair inexpensive items with premium products or services

This is the most common mistake we see when businesses attempt a product bundling strategy for the first time. It makes sense: they’re trying to maximize their profits and someone is buying something cheap, why not try to get them to buy something that’s expensive too.

Product bundling doesn’t mean you should just throw any two or three items together and assume your customers will pay more for them.

Put yourself into the mind of the consumer for a minute here.

For example, let’s say you’re shopping for a new car and your price range is roughly $20,000. If the dealer throws in a free t-shirt and a baseball cap with the purchase of a vehicle, is it going to entice you to buy the car?

Or, on the flip side, let’s say you’re shopping for a t-shirt and a baseball cap with your favorite car company logo on them. Together the two cost about $40. But then, at checkout it’s suggested you buy a car, too. This brings your total to $20,040. Do you do it?

Two items that don’t belong together are not a product bundle. This is especially true if one item is significantly cheaper than the other. But so many brands think two items = a bundle, and it ends up hurting them.

Instead of encouraging your customer to buy more things, a grouping like this actually confuses their initial purchase. Let’s take a closer look.

There’s a study from the Journal of Consumer Research on consumer perception and product bundling called The Presenter’s Paradox.

Here’s what happened. They gave people two options of how to bundle products for prospective customers. The first option was an iPod Touch bundled with a cover. The second option was an iPod Touch bundled with a cover and a free song download. Nearly everyone (92%) chose the second option, which included the free download. However, the study concluded that consumers were willing to pay more money for the first bundle, without the song download.

Why? The benefit and cost of that download aren’t enough to enhance the perceived value of the bundle.

In fact, the cheaper item — One song? What am I going to do with one song? — lowers the perceived value of the total package. That’s not what we want to do. Rather than diminish the perceived value of a bundle, we want to increase it. You can charge more for your products by enhancing the perceived value.

A cheap add-on paired with a premium product makes the whole bundle feel less appealing to the consumer.

This Harvard Business Review article discusses a set of similar studies that had the same results. The study showed that consumers were more likely to pay $2,299 for a home gym than they were to pay that very same amount for the same gym was bundled with a workout DVD. Again, that’s because a DVD doesn’t enhance the perceived value. It actually has the opposite effect and lowers that value.

So if you’re currently using a strategy like this, it could be hurting your average order value as opposed to helping you out. You can fix this quickly and easily.

This guide will also you examples of the right types of products and services to bundle.

Emphasize savings

Offering a discount is a great way to make your product bundles more appealing. It’s a very simple strategy.

If a customer buys two or more items together, their total purchase will be cheaper than if they bought each one individually. However, you need to make it obvious that they are saving money. So tell them exactly how much money they can save by buying the bundle.

Here’s a great example of this from Lowe’s.

The product bundle here is a washing machine and a dryer. If customers buy the pair together, they can save $340. The customer might think, That’s getting close to the price as of either the washer or dryer alone! However, people won’t know how good of a deal they’re getting if you don’t tell them.

You shouldn’t be making your customers do the math manually or hunt through your prices. Make it obvious and plaster the savings on your website, just like the example above. In this instance, by bundling the savings together, it’s much more entcicing. The customer isn’t simply saving $170 on each, which doesn’t seem like that much. They’re saving $340, which has a lot more wow factor.

As a result, they will be more likely to buy these together to get the savings.

Bundle items commonly purchased together

Remember the hypothetical scenario earlier: the car bundled with a t-shirt and hat? Those items are not commonly purchased at the same time, and that’s another reason why that bundling strategy won’t work.

You need to figure out what items people will also need when they buy something specific. Refer back to our last example from Lowe’s. If a customer is in the market for a washing machine, there’s a good chance they also need a dryer. Bundling those two items together is a winning strategy. This makes much more sense than bundling a dryer with a dishwasher. Sure, they are both home appliances, but they are completely unrelated to each other.

If your company sells shampoo, you can bundle it with conditioner. If you’re selling a mattress, you can bundle it with a box spring and frame. These are all products that go hand in hand.

Check out this example from AT&T.

It’s extremely common for people to purchase TV, Internet, and phone services from the same provider. The price bundling strategy here is a well-oiled machine. Just look at the three options above to see what I’m referring to.

It’s $60 per month for just TV. But when you bundle TV and internet together, it’s only $15 more.

This type of product bundle increases the perceived value: Customers are getting something that would normally cost $110, if purchased separately, for $75. That’s a great deal.

This is much better than offering a TV package with free remote batteries, or something cheap that doesn’t add value or entice people to buy. By doing this, AT&T can increase their order value by 25%. Think about that for a second here.

If your company does $1 million in sales annually, you can make an extra $250,000 per year just by increasing the AOV from $60 to $75.

AT&T takes this one step further by adding another bundle option, which includes home phone services. By getting customers to buy this bundle instead of TV alone, the order value is 58% higher.

Use anchor pricing

Anchor pricing is another way to show value in your product bundles.

The idea behind this methodology is that you have different prices on your website that establish a perceived value in the mind of your customers.

It’s an age-old strategy.

How do you sell a $500 watch? Put it next to watch that costs $1,300. The $1,300 item will serve as the anchor, which makes the $500 product seem like a much better deal.

Let’s take a closer look at AT&T’s third option — adding a home phone for an additional $19.99 a month. How many people do you imagine want a phone line? This option may be less about increasing the order value and giving another point of comparison to make the middle option more interesting. Because the $75 package isn’t the most expensive package, the price point seems more reasonable.

The $60 TV package also serves as an anchor. It sets the value of TV alone, so all of the product bundles after it seem like a great deal based on the customer perception of the one product.

You can use this same strategy with your product bundles by adding more expensive bundles, or selling the solo products at a higher price than when they’re bundled. It doesn’t matter if your customers don’t purchase the higher priced packages. They can serve as anchors to make the rest of the options more appealing.

Recommend products to your customers

Show your customers products that will enhance the item that they’ve already added to their cart. Depending on the circumstances, the customer may not even realize that you sell those additional products or remember that they need to buy them until you do this.

Amazon uses this strategy better than anyone else.

If you’re browsing for razors on their platform, Amazon will show you which products are frequently bought with those razors: shaving cream and blade refills. The customer will realize that they need these items to complement what they were initially shopping for.

Instead of having to go back and browse for these products, Amazon has a button that makes it easy to add all three items to the shopping cart. You can get more conversions by optimizing your checkout process. Click to add and Amazon has increased the order value with product recommendations.

Here’s the kicker: none of the products are even discounted.

You don’t necessarily need to offer sales or drastically slash your prices to have an effective bundling strategy. Just by showcasing and recommending similar items that add value to the consumer, you can increase your AOV.

Offer volume discounts

But, you can also offer discounts. In addition to bundling products with other items, you can bundle the same product or service with itself. Amazon does this with Subscribe & Save. It gives your customers a reason to buy more, order-value wise, than what they were going to buy — and to make that next repeat purchase from you, instead of wherever else they would be in the future.

Just like the 5% subscription discount on Amazon, as the volume increases, the price per item decreases. But your average order value will still rise. Here’s a perfect example from Todo Bien Tours.

This company provides a service: bus tours. The price per ticket for their tours varies by the number of tickets sold at once. If you buy two tickets, they will cost $84.15 each, so the total transaction will be $168.30. But, groups of ten pay $69.30 per ticket. While the price per item is less, the total transaction ends up being $630. That’s more than a 400% increase in order value.

Notice how their pricing structure is set up on the website.The chart displays the percent discount based on the number of tickets purchased as well as the monetary value saved per ticket. This is an example of one of our previous points: emphasizing savings. By combining this strategy with volume discounts, Todo Bien Tours can benefit from higher average order values.

Allow customers to create custom bundles

Studies show that 80% of customers are more likely to buy something if they are offered a personalized experience.

Furthermore, 68% of customers will pay more for this type of experience. That’s why customization can highly benefit your bundling strategy. It’s a great way to increase your average order value. Rather than telling your customers which products you’re bundling, let them decide for themselves.

Look at how Texas Beard Company accomplishes this.

By purchasing the bag, their customers can benefit from discounted prices on other products. The customized bundle makes it more enticing for people to buy. Here’s why. Let’s say that the bundle was preset with a bag, beard balm, mustache scissors, and beard brush, but the customer already owns a pair of mustache scissors. For that person, the bundle isn’t enticing. They don’t need one of the products offered, so it’s not a good value for them.

This goes back to perceived value. Though the mustache scissors have a literal value, the value to that customer is $0, so the entire perceived value of the package is lowered. Customized options make the bundle so much more enticing.

Find a way to implement this strategy for your business as well. It can work regardless of if you’re offering products or services.

Conclusion

One of the easiest ways to grow your company is to increase your average order value.

That’s because you don’t need new products, new customers, or higher conversion rates to accomplish this.

All you need to do is find ways to get your customers to spend more money each time they shop:

Make sure you’re not bundling something inexpensive and irrelevant with one of your premium products.
Bundle similar items. You can even recommend products to your customers to create a bundle.
The savings should be obvious, which enhances the perceived value of what you’re selling.
Focus on your pricing strategy. Offer volume discounts and use anchor prices.
You can charge more for your products by letting your customers customize their own bundle.

If you follow these strategies, you’ll be able to increase your AOV.

What types of product bundles is your business offering to increase the average order values on your website?