With rising Customer Acquisition Costs (CAC), many online businesses suffer and find it increasingly hard to sustain profitable on a unit economics level. One way to counter this is to work on your Average Order Value (AOV), in order to boost the overall Customer Lifetime Value (CLV).
We have gathered six different strategies to help boost that we find have a high impact at a low effort.
1. Free Shipping above X
Free shipping might be something most online consumers would expect, but we suggest it should not just be handed out without any limitations. Instead, try using it as a tactic to increase the AOV by only providing free shipping above a certain spend.
2. Bundles and cross promotions
The check-out is probably the most crucial part of your e-commerce store. This also the touchpoint in the customer journey where you have the best chance in up-selling the customer. Bundles and cross promotions are proven tactics to increase AOV, offering the right complementary product to the right customer at the right time.
3. Introducing high-ticket items
Expensive or cheap are both relative terms and used in comparison to other options. You can change the perception of this by controlling this comparison on site. Most consumers don’t like feeling cheap or overly splurging so they go with a middle alternative. By introducing a high-ticket item, your former “expensive” inventory now seems like a reasonable middle option.
4. Introduce a wallet-opener
Just as introducing high-ticket items can push your AOV in the right direction, the same goes for cheaper offerings, so called “wallet-openers”. Traffic that might consider becoming customers needs to have an introductory offering to set them in a mood of shopping before up-selling them on other inventory.
5. Award your most loyal and valuable customers
All customers behave differently and should therefore be dealt differently when it comes to promotions and offerings. By targeting the most profitable ones from your CRM, you can make a significant difference on the average customer behaviour. Basically, targeting the right customer, at the right time with the right offering.
6. Acquire traffic of high spenders
Research show that iPhone users spend on average 3x the amount of the average Android user. This is just one example of many, where you as a digital marketeer must make sense of not only the amount of traffic you are receiving but also what sort of traffic that ends up on your site.
Are you struggling with a poor CLV to AOV ratio? Book a free 30-minute consultation with us here.