All online stores and major companies are aiming - through e-commerce - to increase the amounts that customers spend in their stores on each order, which lead to increase the rate of orders in those stores.

Here, it is necessary to pay attention to the value of the average order within the online store, by knowing the time that customer spends in your store on one transaction financially, which is increased by following several methods, and here it highlights the interest in your business and products.

In the following article we will discuss several ways to increase the average order value:

Basic concepts in e-commerce

What is the average order value?

The average order value is known as the abbreviation Average Order Value (AOV), and it indicates the average amount spent each time a customer places an order on a website or mobile app. To calculate your company's average order value, simply divide total revenue by the number of orders.

Average order value = Number of orders / Total revenue

The average order value can be tracked through the Google Analytics. Once you enable e-commerce tracking in Google Analytics, go to Conversions (E-Commerce) Overview, and you will find a chart in addition to tables displaying revenue and conversion rate on the left and transactions on the right, and the average order value within transactions.

What is the lifetime value of a customer?

It is the average profit that can be achieved from one customer throughout his/ her dealings with your online store. The customer’s lifetime value is important to determine the actual values of return on investment for each customer, and thus helps focus on the campaigns and channels that give the best results.

The customer's lifetime value 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 individually.

Customer LTV = Total Transaction Values x Average Gross Margin.

What is the Average Basket Value (ABV)?

The average basket value metric is similar to average order value, as it measures the amount of items sold in each purchase transaction rather than measuring how much customers spend in each transaction.

Ways to increase average order value:

The amounts that paid by customers to buy products are increased from online stores in many ways which are:

Determine 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 that qualifies for free shipping or other discounts, and using the feature of slide show in your online store to confirm to your customers that you are offering an incentive for the minimum order, as an examples below:

• Offering free shipping on orders over 100 $.

• Get free pants on the orders over 100 $.

• A $200 shopping voucher if you purchase 1,000 $.

• Offering a 20% discount on orders over 100 $.

Provide Product Recommendations:

Many customers of your online store browse a specific product and ignore the rest of the others. Thus the average value of the customer’s order is small, as to avoid this situation, you must provide recommendations about the product either on the product pages or in the user’s shopping cart.

You can display the products that customer prefer to buy, or you can display the new products which your store featured.

Suggestion of Complementary Products:

This method is based on suggesting other products on the product page that are related to it, instead of suggesting popular or best-selling products, as it is possible to link products that are related to the product in the customer’s cart, such as add-ons.

Create a Product Bundle:

Create a group of products within a package that costs less than if each product were sold alone, and enables your customers to obtain ready-made packages to choose easily. The product package helps to meet all customers’ needs while continuing to increase the average demand in your online store, such as: by grouping 40 products into a bundle titled products for 50 $, or products packed with free shipping.

Depending 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 buying from your store. This encourages them to buy many products, which leads to an increase in the average value of your order, so you must take advantage of earning points in this program in order to achieve your goal of increasing sales.

Customize Customer`s Pages:

Your online store helps you create multiple windows to divide shoppers into segments. You can also use personalization tools that are easy to create and display the products that interest the customers. These tools will track the products that the customer has viewed or what they have clicked on.

It also goes in-depth into researching the type of browser and device which the customer uses, orders history, and location, etc., which facilitates the process of purchasing products for customers, and in turn helps increase the average order value of your online store.

Meta Description:

It is necessary to pay attention to the value of the average order within the online store, in order to know how much money a customer spends in your store on one transaction, and this can be increased through several ways.