All the electronic stores and major companies aim through e-commerce to increase the amounts that customers spend in their stores on each order, that is, to increase the rate of orders in those stores. So, it is necessary to pay attention to the value of the average order within the online store by knowing how much the customer spends in your store on each single transaction financially, which is increased by following several methods.
These tips are clearing how your business is important and which of the products are more attractive than others in order to achieve greater profits.
Through the following article, we will discuss several ways to increase the average value of the order.
Basic concepts in e-commerce:
What is the average order value?
The average order value or (AOV), is a metric for e-commerce businesses that measure the average total for each order that gets placed with a business over a specific time period. in other words, the amount that each order made through your store, and the value of the order is calculated at each online store by dividing the number of orders by the total return, such as:
AOV = Number of Orders ÷ Total Return
The average order value can be tracked by using the Google Analytics as well as other benefits it provides. Once you enable Google Analytics e-commerce tracking, go to Conversions (e-commerce) to take overview, you will find a chart and tables showing revenue, conversion rate on the left and the transactions on the right, and the average order value within the transactions.
What is the lasting value of the customer?
It is the average of the profits that can be achieved from one customer throughout the period when he / she is dealing with your online store. The importance of the lasting value of the customer is to select the actual values of return on investment for each customer and thus helps to focus on the campaigns and channels that give the best results.
The lasted value of the customer is calculated through the time indicator, i.e. the total profits from all the customer’s purchases from the online store within a specific time period for each customer separately.
Customer lasted value = total transaction values x average gross profit margin.
What is the average value of the shopping cart?
A measure of average shopping cart value is similar to average order value, as it select the amount of items sold in each purchase transaction rather than measuring how much customers spend on each transaction they make.
Methods of increasing the average order value:
The amounts paid by customers by purchasing products from electronic stores are increased through several methods, including:
Selecting the minimum order for discounts:
It is one of the best ways to increase the average order in your online store by setting the minimum order amount eligible for free shipping or other discounts, and using the ribbon feature in your online store to assure your customers that you offer an incentive for the minimum order, for example:
- Offer free shipping on orders over $100.
- Get free pants on all orders over $100.
- A $200 purchase voucher if purchase is $1,000
- Offer 20% off orders over $100.
Provide product recommendations:
Many customers of your online store browse a specific product and ignore the rest of the other products, therefore; the average order value of the customer is low, and to avoid this situation it is necessary to make recommendations about the product either to the product pages or in the user’s shopping cart, in order to display the most products that buy by other customers or new products of your store.
Suggestion of complementary goods:
This method is based on suggesting other products on the related product`s page, instead of suggesting popular or best-selling products. It can link between 0the products that are related to the product in the customer's shopping cart, such as (Additions).
Create a product package:
Create a group of products within a package that costs less than if each product is sold alone and enables your customers to obtain ready-made packages to choose from it easily. The package of products meets all customer needs while continuing to increase the average order in your online store, such as: collecting 40 products in a package of $50, or collecting a package titled Free Shipping.
Dependence on the customer loyalty program:
This method is considered one of the best ways to retain customers and strengthen relationships with them, because the customer loyalty program depends on the best discounts for customers who repeat their purchase from your store that encourages them to buy many products, in order to increase the average value of your order. So it is necessary to take advantage of earning points in Customer loyalty program well to achieve your goal to increase sales.
Customizing customer`s pages:
Your online store helps you to put multiple windows to divide shoppers into segments, and to use the customization tools that are easy to create and display the products that customers are interested in, as these tools will track the products that the customer has viewed or clicked on. And this method helps you to delves into the search for the type of browser and device which the customer is using, the order history and the location, etc., which facilitates the process of purchasing products by customers, and in turn the customer helps to increase the average order value of your online store.
It is necessary to pay attention to the average order value within the online store, that is, to know how much time the customer spends in your store on one transaction financially, and it is increased through several methods.