A guide on increasing average order values for Shopify ecommerce stores

Revenue is essential for a successful business. You need to do everything you can to earn as much money as possible to help your business thrive. But, getting more customers to generate more sales is hard, time-consuming, and expensive.

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Instead, you can focus on making each sale more valuable so that you can generate the cash flow you need to expand.

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When it comes to maximizing your profitability without spending a ton of time or money on marketing or supplier negotiations, you’ll want to focus on increasing your average order values.

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What is average order value (AOV)?

Average order value (AOV) refers to how much the average customer spends in your store at once. Larger purchases increase your AOV, while smaller purchases lower it.

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You can calculate your AOV by dividing your revenue by the number of sales you made.

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For example, if you’ve generated $80,000 in revenue on 500 sales, your average order value is $160.

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Why is increasing AOV important?

It’s important to increase your order value because it lets you do more with your business’s cash flow. Generating more sales and revenue is always great, but increasing AOV has an added benefit – it doesn’t cost more to do.

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Customers come with an acquisition cost. Whether you recruit customers through PPC marketing, SEO, social media marketing, or any other form of media, it takes money to get them to your store. Then, you still need to convince them to buy from you, so acquiring new customers can get expensive quickly.

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Growing your AOV is not about getting more customers. It focuses on making each customer who is already going to make a purchase worth more to your business by increasing how much they spend. It’s free, simple to do (with the right app), and highly effective.

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The resulting revenue increase also allows you to expand your business by spending more on advertising, increasing buying power to increase margins, and improving customer service to improve satisfaction for higher customer lifetime value (CLV).

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How to increase your average order value on Shopify

Increasing AOV is all about getting customers to spend more when they make a purchase. So, you’ll need to implement strategies that encourage larger purchases.

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Upsells and cross-sells are the best way to increase AOV in Shopify stores. They’re general strategies that involve making offers for discounted products, product customizations or upgrades, and add-ons to existing purchases.

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When you upsell, you’re offering upgrades to a single product that increases its value. Cross-sells are based on adding additional items to their cart instead of upgrading their current product.

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Both are effective, and the best strategy will involve including them both to maximize your chances of being successful.

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Here are the best upsell and cross-sell strategies for your Shopify store.

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Buy one, get one (BOGO)

BOGO deals are a customer favorite because they let them choose their discounted product. It’s effective when you’re selling multiple products from the same line but in different styles, including clothes or collectibles, that people would want alongside their original purchase.

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Size upgrades

More is better – especially when it’s a better deal.

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Size or quantity upgrades at a discounted rate are popular upgrades for food and other items that get used up quickly. They encourage new customers to spend more now instead of hoping they come back to reorder after trying the product.

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Bundling

Bundling allows you to cross-sell complementary items to the primary purchase as part of a set. Bundles can be additional variations of the main item, like different soap scents or accessories like batteries for electronic purchases and cases for phones.

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Or, in the case of fast food restaurants, “Would you like fries with that?”

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Customization

Customization is an upselling strategy that excels when it comes to phones, jewelry, and other personal products. It usually doesn’t cost much to do and sells for a premium, which lets you attain higher margins and generate mostly free revenue.

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Warranties

If you’re selling electronics or items that have the potential to fail, you might consider selling a warranty for it.

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Extended warranties have a high profit margin because most people forget about them or don’t use them. However, you’ll be able to claim its cost upfront to increase your revenue.

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Free shipping minimums

One thing reigns true throughout the history of eCommerce – people hate paying for shipping.

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You can take advantage of their hatred for shipping fees by offering free shipping after orders hit a certain price. It’ll encourage people to spend more because they’ll think of the shipping cost they save as a discount on whatever they buy.

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Set your free shipping threshold at a point slightly above your best-selling products so that they have to make a customization or buy another product to get the shipping. Otherwise, if the item cost is enough on its own, you’re not actually increasing your AOV.

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Free gift thresholds

Similar to free shipping, setting a minimum for a free gift can encourage customers to spend more. Be sure to choose a product that most customers will want or tailor the free item to the primary product they’re buying so that the offer is worthwhile.

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Annual plan upgrades

If you’re selling subscriptions or memberships, your goal is always to lock the customer in for as long as possible to start off. If they’re month-to-month, you risk the chance of them canceling and not coming back.

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However, if you offer a discounted annual plan, you’re able to secure more money upfront without needing to worry if they come back or stay subscribed.

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Premium subscription upgrades

SaaS companies that offer suites of software can benefit from offering premium subscription upgrades to customers as an upsell or cross-sell.

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If someone is buying a single product, you can offer additional products at a steep discount to encourage them to spend a bit more at little to no cost to you. Or you can allow additional users like Microsoft offers for Microsoft 365.

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Using UpsellPlus to maximize your AOV

Cross-selling and upselling are essential strategies for increasing your Shopify store’s average order value. They may seem complicated to start using, but the right app makes it easy.

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UpsellPlus is a comprehensive upsell app for Shopify that lets you implement many of the strategies we’ve listed for increasing revenue. With it, you can add offers to your checkout flow so that customers have the opportunity to take advantage of any upsells or cross-sells you create.

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ShopBrain, the app’s algorithm, uses real data to make recommendations for offers to make and related products to include in them. You’re also able to add custom logic to ensure relevant offers are made based on the purchased product, change text for conversion rate optimization, A/B test different options, choose your preferred location for the offer, and much more.

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Growing AOV is crucial to expanding your business. Don’t wait - get started with a free 7-day trial of UpsellPlus today.

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