Contents

What is Average Order Value (AOV)?

One of the 5 levers, Average Order Value is the average dollar amount spent by a client each time they place an order or make a transaction at your store, on location, or on your website.

It is calculated simply as:

What is a good AOV?

Your average order value is relative to your product and/or industry.

If you sell high ticket items (saunas, expensive jewelry, furniture, etc.), naturally, your AOV will be higher.

If you sell low ticket items (coloring books or t-shirts), you’re AOV will be lower because the items you sell are at a lower price point.

A good AOV is typically an average order value that is higher than competitors in your niche.

Why is AOV so Important?

Average order value is so important because it means that you would earn more revenue from the exact same number of clients.

This has several knock-on effects that will help improve your business and provide more value to your client.

High AOV vs. Low AOV Store Example

Two stores both specialize in the sale of home electronics. Both stores bring in $1,000,000 in revenue per month.

 How to Increase AOV

The key driver in increasing average order value is to provide more value, a better service, and a better or more complete solution than your competitors.

The following strategies are not hacks just to get more money out of your clients. They are strategies to help you provide more value and build a better relationship with your client which in turn will lead to higher profits.

While there are a number of tricks to boost average order value, the simplest way to immediately increase AOV is to raise your prices.

Raising prices for the sake of it may not be the best move, but price increases are something that too many business owners fail to implement for fear of losing clients.

Most cost increases stem from these 3 reasons.

1. Due to rising input costs
2. You are currently under market price
3. Because you are providing more value

Be sure to communicate the price increase to your clients and tell your clients why.

As you read through these strategies, challenge yourself to think about how you may be able to apply each technique to your business. It is not always obvious, but the real magic is in playing with ideas, testing, combining, and ultimately building a winning strategy.

Keep on reading to learn more.

Craft Your Hero Story

Humans have been communicating through stories since the dawn of time.

There is no better way to connect with your clients than to share your origin story. Your why for doing what you do.

Goettl, a plumbing and HVAC company, is a great example of how you can tell stories in a boring business. They build connection on the very relatable story of a 10 year-old boy holding a flashlight for his dad. 

It doesn’t matter what industry you are in, a good story builds trust and connection on another level.

Craft Your Unique Selling Proposition

Crafting a Unique Selling Proposition or USP sets you apart from the competition.

Your USP is the secret sauce, the unique thing you do better, the superior benefit that no other competitor can provide.

Because you are the only one who can do it, and you are not competing on price, you have the ability to charge more for the trust you’ve earned.

Look no further than Death Wish Coffee and their USP – “The World’s Strongest Coffee.”

When a client is looking for the strongest coffee on the market, and they find this brand, they stop and take notice. The search has ended. This is the choice.

Death Wish Coffee is approximately 150% more than the coffee I buy at the local market. But for their clients, price no longer matters.

Share Knowledge

Clear Communication

Particularly in high-ticket sales, clear communication is essential to a higher AOV.

Clearly explain to your client:

Clear communication leads to higher buyer confidence. Higher buyer confidence leads to larger tickets.

Transparency & Honesty

The whole cancel culture thing can make it a scary proposition to share anything in hopes that you don’t accidentally offend someone.

Still, transparency and honesty in business are paramount to building trust with a client.

When you have a reputation for being transparent and honest, people will spend more because they know they’re not concerned they are going to get ripped off.

Reviews & Testimonials – Social Proof

Reviews and testimonials matter.

Reviews and testimonials are a form of social proof that give prospects the confidence not only to buy from you, but to spend more.

At Bad Ass Work Gear, we encourage our customers to stay on brand when providing reviews. This resonates with the our customer base and provides a huge boost in trust.

For a bigger bang for your buck, obtain and highlight testimonials from celebrities, notable companies trusted members of your community, or notable press outlets.

Simplify Your Return Policy

Knowing they can return an item if it doesn’t fit or doesn’t work out will provide buyer confidence. This will lead to higher cart totals.

I recently came across a high-end auto carpet business that made custom flooring for exotic and luxury vehicles. To make a return in the case that the carpet did not fit, you would need to take a photo, have their engineers review the photo, have the engineers decide on whether a return is justifiable, then pay to ship them back.

These clients feel like they are playing Russian roulette when they buy. They are hoping it will work out.

On the other hand, Michael’s, a large arts and crafts retailer chain in the US, implemented a return policy when the pandemic shifted a large portion of their sales from in-store to e-commerce. They added a 60-day free return policy which was noted in their Google Shopping Ads. Reducing uncertainty, they saw an 11% increase in AOV.

Another great example would be Casper, the online mattress store. Given the difficulty in shipping a mattress, you would think buying a mattress would be a shot in the dark. What if you don't like it? How would you even get it back in the box? Casper has it covered with their 100 Night Trial return policy.

An Amazing Guarantee

It is one thing to know you can return an item. It is a whole ‘nother level to provide an amazing, no questions asked, no hassle, no problem, satisfaction guaranteed money-back guarantee.

The cheap junk sellers and lackluster service providers cannot offer this type of guarantee.

But you sell quality goods and services. You can remove all risk from your prospects buying journey so they just have to buy from you. And they’ll spend more.

One of my all-time favorite guarantees is Cutco's Forever Guarantee.

Referral Programs

One of the ultimate ways to gain trust quickly is through a trusted referral of a friend.

There is no better way to do this than through a tested referral program.

Referral programs can be implemented digitally with apps and plugins or you can go the old fashioned route like the classic spa & wellness center referral card example below:

Your client, by the guidance of their friend’s high recommendation of your business, will certainly spend more with you now that you’ve come highly referred. 

Strategic Alliances & Endorsements

A standard endorsement is when a celebrity or someone well known in your community endorses your product or service.

You can take this a step further by entering a strategic alliance with someone who has a similar client base but is non-competing. In this arrangement, your partner will endorse you directly to their client list and share in the profits that are generated through a revenue share deal.

Customer Loyalty Program

A customer loyalty program provides points or other means of redeeming discounts, free product, and other rewards.

The goal is to offer something highly desirable so that the client will spend more each transaction. Loyalty programs have the double benefit of increasing repeat purchases as well.

Minimum Spend Techniques (MST’s)

Minimum spend techniques are perhaps the easiest to implement and are almost guaranteed to drive an increase in AOV.

To get started, you need to know your current AOV. Then, you set your minimum spend threshold just a bit higher than your current AOV.

And free shipping is just one of a few qualifiers:

The correct qualifier depends on the business and product lineup. Test each offer to see which is best suited for your business.

Price Anchoring

Price anchoring is a technique where you provide a higher or lower price to establish a frame of reference which you can use to guide your client to buy at your preferred price.

Price is relative to your client’s perception of you, your brand, and the quality of your product / service.

Below, are a few price anchoring techniques.

Good, Better, Best

Good, Better, Best Pricing, or GBB Pricing, is my personal favorite.

This method utilizes three pricing tiers.

• Good Tier (low price) – the value price for customers who cannot afford your better tier but still want or need your products or services
• Better Tier (middle price) - the better tier is typically the best value for your customer and the one you want most customers to buy
• Best Tier (highest price) – your highest priced option that serves both as a price anchor for your better tier and as the best option for more discerning or enterprising customers.

Here, AHREF's pricing is formatted in a good, better, best format:

It works in almost any industry, from software sales to plumbing. In fact, this is exactly how my plumbing contractor presented their hot water heaters!

This strategy shifts the conversation from cost to value, helps the client focus on your different packages instead of comparing you to competitors, and will most assuredly increase your AOV.

Price Anchor Merchandising

Price Anchor Merchandising is an adaptation of the Good, Better, Best technique in physical stores or even e-commerce. Here, you will take similar items at different price points and display them together for a similar effect.

This technique also plays on the idea of price differentiation. The University of Yale conducted a pricing study that showed two similar items at the same price can induce buyer paralysis, where the buyer doesn't buy anything because they are unable to make a choice.

The similar items at the same price had a buy rate of 46%. When the cost of the similar items were offered at different prices, the buy rate went up to 77%.

Decoy Price Anchoring (Asymmetric Dominance)

Decoy pricing is a deliberate attempt to nudge clients to purchase the product you want by utilizing a decoy to make your preferred product more desirable.

In a fascinating episode of National Geographic's Brain Games, the psychology of this experiment was demonstrated at a movie theater. They offered popcorn to movie goers at $3 for a small and $7 for a large. Nearly everyone bought the small, because $7 was just too expensive.

However, after they introduced another "decoy" option, a medium priced at $6.50, more movie goers started to choose the large. You can see many even talking themselves up from a medium to a large because "it is only .50c more expensive!"

The running joke is how would anyone sell a $5,000 watch? Simple, put it next to a $10,000 watch!

Price Anchor Fire Sales

In furniture stores, apparel, and retail, this is often seen when items are on sale. You’ll see the higher price $200 struck out, and the new sales price $100 is shown.

This establishes the higher value as a frame of reference and makes the buyer think they are getting a great deal – even if they aren’t.

Competitor Price Anchoring

Competitor Price anchoring is when you take your competitor or multiple competitors’ pricing and use it as reference for your pricing.

You can use it to justify higher pricing, by also highlighting the value you provide that your competitors do not. Or, you can use it to show your prices are lower than the competition – though I hope this is not your strategy!

Not my favorite technique, but it can be used effectively to sell, qualify clients, and bring in larger tickets.

Urgency and Time Sensitive Order Bumps

Urgency, or a time sensitive offer, is more commonly thought of as a conversion rate technique rather than an average order value booster. So, how can we utilize urgency to increase AOV?

Combining urgency with other pricing psychology or value driver average order value techniques will improve conversion on these higher priced packages, giving AOV a further boost.

What techniques are best combined with urgency?

Buy One Get One Offers (BOGO)

Buy One Get One Offers were originally developed to drive traffic to retail stores through print advertising. How can this old school technique be leveraged for an increase in AOV?

One of the best examples can be found in t-shirt sales at the souvenir shop of your favorite beach town or in e-commerce. The Buy 2 Get 1 Free promotion is spectacular at driving a 2 shirt sale when client’s would only typically buy 1.

Here, Life Is Good, is making a BOGO offer on socks. 

One for $10 or three for $30?

Really, who can pass up on this offer? I'd definitely buy an extra pair of socks to get the free pair. 

Free Trial (Delayed AOV)

What the hell is delayed AOV? Is that even a thing?

Free trials are usually a great way to get customers to try a service and then convert once the trial ends.

A great example of this is this is the typical cable company offer.

Cable companies sell their basic package with a free upgrade to their higher tier for a limited period of time. In this case you'll see a free trial of HBO Max, Showtime, STARZ, Epix, Cinemax for the first 3 months. 

A percentage of users will then find new channels they can’t live without and opt in for the higher priced package once they’ve had a taste of the good life. *Do note the Good, Better, Best technique in play here as well.

SAAS companies are ripe for this technique as well. Many companies will offer a 7 day trial to get clients into their funnel. However, not many offer a free trial to existing customers to try out a higher tier.

The AOV in this instance is delayed but often results in higher future rates.

The Buyer’s Journey

What is the journey the buyer is taking through your sales process and how can you maximize this journey to increase AOV?

Grocery stores may be the best example and the science behind it absolutely fascinates me. And it is a literal science.

Grocery stores have spent millions of dollars designing the perfect layout that nudges customers to buy the most upon every visit.

As you enter, you are most likely to encounter the fruit or bakery section. It gives an appearance of freshness, the bright colors of the fruit and wonderful smells from the bakery heighten your senses, wet your taste buds, and make you just a bit happier.

Coincidentally, the other essentials, milk and eggs, are all the way on the other side of the store – meaning you’ll have to walk through the maze of the many temptations of the grocery store along the way, probably picking up a few other items even if you didn’t intend to do so.

Given a grocery store has put this much thought into store design, have you really thought through your buyer’s journey?

Map out your entire customer journey from first contact to sale, and actively look to improve it in every single step.

Highlight Reel Techniques

The following Highlight Reel Techniques are display or design-based techniques that highlight or emphasize the average order value booster.

Read on to learn more about these techniques.

Highlighting Higher Priced Options

This technique is a design hack where you highlight or emphasize the pricing tier, package, plan, or item that you want clients to choose more often.

Highlight Best Sellers

Highlighting best sellers is a great way to direct customers to the highest converting, AOV boosting, most value packed products and services.

In our first example, Nutriseed, utilizes their homepage to direct users to their 3 best sellers.

Most e-commerce software allows you to sort your products by Popularity, Price (High or Low), Featured, Alphabetically, or by New/Old.

Changing your default sorting to Popularity will put your best-selling products in front of your visitors first. In the second example, our friends over at Tag Safari have set their default sorting Best Sellers, showing off their most popular items right when you hit the page.

This does two things:

• Increases the chances of customers buying multiple best-selling products.
• You cannot increase AOV if customers do not buy in the first place, so this drives the first purchase and allows opportunities for upsells and cross sells.

Don’t think of this as only an e-commerce technique. Think of how you can apply it to your business.

Highlight Trending Products

If your product line is less evergreen or more trendy, what was popular last month, may not be popular this month.

In this case, instead of highlighting your most popular products, you’ll highlight the trending items. The trending period should be determined by your sales cycle.

Highlighting Sales / Discounted Items

If you are utilizing sales to drive traffic to your store, it makes sense to highlight by sales / discounted items.

Best Buy is a great example as they cohesively promote their sales through print and digital and tie it all together on their website so that the users coming in for the sale know exactly how to purchase the sale items.

Sales / Discounts can initially lower AOV. But you, smart marketer, will surely combine these other strategies to turn that one sale into full shopping cart!

Highlighting Featured Products

Do you have a new product launch or heavily promoted offer? Are your products seasonal?

Toyshades, a sunglass retailer, expertly switches featured product collections based on season. In this example, they show off their Autumn / Winter Collection to coincide with buyer preferences in Winter months.

Make the most out of your seasonal or special promotions by highlighting your featured products.

Highlight Product-Level Customer Recommendations with Testimonials (Double Play)

This technique is a combination of the Highlighting Best Seller / Featured techniques with an added dose of social proof.

Here, you will highlight your best selling with the added twist of utilizing a customer recommendation or testimonials.

Look no further than Quad Lock. They've incorporated a product level recommendation to build your own Quad Lock 360, while tapping reviews from reputable and niche publications, testimonials from celebrity biking experts, and display a selection of the 82,000 reviews on the product. I'm convinced!

Given a BigCommerce study shows that testimonials can drive up to 62% more revenue per visitor and spend 3% more on average per order, highlighting this on a product level can be a very powerful technique.

Detailed Descriptions

Generic descriptions kill AOV.

If your business model is to list as many products as possible and sell on volume, maybe you can get away with generic descriptions.

But if you are interested in being a premium brand, your product descriptions should be:

• Detailed – provide all the details a client would need to make a purchase
• Informative – show the benefits of your product and answer potential questions
• Emotive – the best product descriptions invoke an emotional response by telling a story

Firebox has some of the best product descriptions I've ever seen. Just browse through their product listings and prepare to laugh (if you have a sense of humor).

Not everyone can utilize humor, but Firebox's product descriptions are delightful and completely on brand. 

Amaze with Photography

My first successful e-commerce store started with 3D Renderings because I couldn’t afford decent photography back in 2013.

Today, image driven social media photography can skyrocket your brand.

Fellow Louisianian, Derek Curry, owner of Sneaker Politics, blew past the big boys in the sneaker industry with a lot of grit, determination, and great photography.

Matt Welty, Senior Editor at Complex.com was recently quoted saying the following about Sneaker Politic's photography.

Product Videos / Demos

Like great photography, product videos can show your product in greater detail.

Unlike photography, video gives you the chance to sell the product. This product video from Solo Stove not only sells their latest and largest product offering, but provides background on the company's mission, connecting with potential clients.

User Generated Content (UGC)

What is better than you claiming the greatness of your product / service?

Having your clients do it for you!

We’ve talked about the power of reviews and testimonials. Adding this UGC to your product pages is both a huge conversion and AOV booster. Look no further than BOOM to see masterful execution of this technique.

You’re not limited to reviews and testimonials. Just like in the example above, utilize customer photos and videos as well to drive an even larger increase in average order value.

Upsells

Upselling is when you offer a better, higher priced, upgraded version of your base offer. There are numerous types of upsells you can employ.

Better Solution Upsell

The better solution upsell is offering a higher quality option than the base offer. It is perhaps the most widely used technique and can be used in any industry.

Crutchfield has one of the best examples I've found. If you take a look at the product page for their best selling Onkyo TX-NR5100 home theater receiver, you will see an excellent example of a detailed product description that provides all the info you would need to make a buying decision on this receiver.

But what if you 80 watts per channel isn't enough for you? You want more power!

Keep scrolling because just below the product details, they suggest the next level up of the same receiver - the 6100 series with 100 watts per channel.

This upsell allows the client to easily decide on the right product for them, and gives Crutchfield a nice increase in average order value should the client choose the higher priced option.

Quantity Based Upsell / Bulk Discounts

The quantity based upsell is offering more, or higher quantities of, a product. This is usually for consumable products but not always the case.

Penetrex has a low SKU business. Utilizing the quantity based upsell and providing a bulk discount, they can increase AOV by selling 3 or even 6 units instead of 1, while providing superior value to purchasers.

The quantity based upsell is typically used in two ways.

1. An option to buy a higher quantity at a discounted price.
2. An option to add a subscription to replenish at established intervals.

Option 1 will increase AOV and Option 2 is more of a customer lifetime value play.

Customization Upsell

The customization upsell is a strategy utilized for products that allow customization or personalization.

Fender has built an app that allows you to fully customize your guitar including wood type, neck shape, color, strings - you name it.

The customization upsell doesn't have to be this complicated.

I utilize this upsell in one of my stores to allow clients to monogram their name on their bag, and it offers a very good average order value lift while providing a valuable option to my clients.

Cross-Sells

Cross selling is selling a complementary product – adding on accessories or products that should be bought with the product you are selling to get a complete solution.

My favorite thing about cross sells is that you are truly helping the client.

For example, let’s say you operate a paint store, and you, sell the BEST paint. Still, you cannot paint without a brush, and your client has to go to another store to buy that brush. Wouldn’t it be in both your and your client’s best interest to also sell the brush?

Squatty Potty, my all-time favorite Shark Tank product, is definitely considered a one-time purchase. To increase AOV, they've implemented an in-cart cross sell to their Pootanicals Potty Spray and Instant Wet Wipe.  This cross sell serves double dooty (get it!?!) to also introduce a consumable item to boost customer lifetime value.

If they love the product, they will keep coming back to buy the consumable item over an over again.

Look at everything your client needs, both before and after, to accomplish their goal with your product. List out everything that is needed, and then, sell those items as well.

Product Recommendations

Product Recommendations are a type of cross sell used often used in e-commerce.

Additional product are displayed on the product page that are similar to or complementary to the product they are viewing.

Pura Vida bracelets includes a "Complete the Look" recommendation engine on the product level allowing the customer to buy all of the items the influencer is wearing in their photo. Awesome implementation!

Data Based Upsells & Cross Sells

Data based upsells and cross sells utilize customer data to understand which offer is most likely to be purchased by your customer based on what the client purchased and what previous clients in your database have purchased.

Huel is providing value, but they are also receiving higher order values and  introducing purchasers to new products which they may return for at a later date.

This is a very powerful technique almost guaranteed to increase average order value.

Payment Plans & Financing

Especially for higher ticket items, offering a payment plan or financing can help clients who cannot afford or would like to spread out the payments of an item or service.

The most interesting example of this was from a recent conversation with an owner of a Christmas light company.

He added a financing option to his Christmas light installation business. Surprisingly to me, the financing offer was very popular. Digging into the data, it started to make sense.

Many families spend a lot of money at Christmas time for presents for friends, family, and especially children. While these families can afford Christmas light installation services, they were keen to spread out the cost with financing while they were also paying off presents and other expenses.

Even lower cost items can benefit from financing. Here, you see Zappo's utilizing Afterpay to allow clients to pay in 4 installments.

Mix & Match Offers

Mix and match offers are similar to product bundling, except the client gets to choose the bundle.

Victoria's Secret utilizes this strategy on lingerie and bathing suits. Once you find the style or fit that you like, you can go back and get different colors and patterns of the same item and get a discount once you meet the minimum item or dollar value.

Consultative Sales Training

This is simple. Have every customer-facing person in your organization trained in consultative selling.

Selling is a skill. Consultative selling is an investigative approach that allows the seller to understand the needs of the client so that they can guide the client to the best overall solution.

Unlike other high-pressure sales techniques, consultative selling acts more like a trusted advisor rather than a salesman.

Having your team understand the needs of the client will allow them to not only sell the higher ticket offer, but they will also be able to upsell and cross sell effectively as it will be part of the overall solution.

Phone Support

Many online businesses have no phone number. Many service businesses don’t answer or don’t even return calls.

Phone support is a huge opportunity that too many companies do not take full advantage of.  With phone support, you can:

The higher the ticket, the more important it is to have. The key is to stop looking at phone support as a answering service. Treat your phone support as a sales channel with it's own funnel.

Live Chat

Some clients do not like interacting via phone. Some just want a quick answer.

Live chat can help in both instances.

Email Flows

Email flows are like having an army of salespeople who follow instructions 100%.

Once set up, email flows are simple, repeatable, and work automatically in the background while contributing majorly to increased average order value.

You should absolutely set up a post purchase email flow to maximize AOV of every order. I’ll share a simple email flow that you can implement in Mailchimp, Klaviyo, or your preferred email automation software.

In this example, the customer buys the initial product, and is immediately offered the order bump during checkout.

After the purchase is complete, an email is sent to upsell or cross sell a relevant item that would have a high percentage of converting with the purchased product.

If the upsell is purchased, you’ll send another email to cross sell another relevant item.

If the upsell is not purchased, you’ll trigger a down sell email.

We can of course bet much more complicated. Here, the goal of this email flow is to maximize the value of every single transaction.

Get Better Leads

Find the people who are ready and willing to buy instead of marketing to everyone.

The advent of Google Adwords changed the game of internet advertising and has been further refined ever since. The real beauty of this type of advertising was the targeting.

For example, a solar installer often runs into trouble when the buyer is close to the point where they need a new roof, but they are still 3-5 years out. They don’t want to replace the roof early, but they do want a rooftop solar system.

So the solar installer can go to roofers to get leads. The roofer can’t really make many aftermarket sales, so selling the lead puts a little more money in their pocket. The solar installer gets someone with a brand new roof to sell their system to, and everyone wins.

Shopper Personalization

This is an awesome strategy but a bit more technical to implement.

It utilizes a customer’s previous shopping behavior, products browsed, and products ordered to create targeted, personalized shopping experiences and advertising flows.

This can be implemented into the user experience of the website or even add omni-channel flows of retargeting, snail mail, and more.

Because the data makes the experience so personalized, there is a big jump in both conversion and AOV when implemented.

Value Ladder Strategy Double Punch