eCommerce Success

5 Ways to Increase Ecommerce AOV (Without Increasing CAC)

May 19, 2023

I don’t know of any ecommerce business owner who is not constantly looking for ways to increase conversions and revenue. Do you?

I bet not.

Ask any ecommerce retailer how they intend to boost their revenue. For most of them, finding more customers is the first thing that comes to mind. It’s an important strategy but not the only way to grow.

Effective conversion strategies can turn potential customers into actual ones.

However, you'll still need to spend more to acquire new customers, and getting them to checkout isn't something that's easy. In fact, it costs 222% more to convert a new customer today than it did in 2009. 

If it costs more to get customers over the finish line, what are your options for increasing the revenue you’re already making? 

Simple. Increase average order value (AOV). 

Instead of spending more and more money wooing new customers, use your charm and irresistible offerings to convince current buyers to increase the amount they’ll spend on your site.

All you need is an incentive — a little carrot — to get your customers to spend more, increase average order value, and boost your revenue. 

What is Average Order Value?

Your average order value is the average amount a customer spends on your ecommerce store. This directly relates to your customer lifetime value (CLTV). If you want to increase your customer lifetime value, you’ll start by increasing your average order value.

To calculate your AOV, divide the total revenue in a certain period by the number of orders.

The formula for calculating AOV is simple: divide your revenue by your number of orders. 

Average Order Value =RevenueNumber of Orders   

how to calculate average order value (AOV)

For instance, suppose your online store sales were $50,000 in January from 1,000 orders. Then, $50,000 divided by 1000 = $50. 

So, your January AOV was $50.

If you increase the average order value by only $10, your revenue would increase by 20%, a whopping $10,000! The total revenue for that month would be $60,000.

Achieve this by offering your customers irresistible incentives to get them to spend more on each order, either by purchasing more expensive products or more items than they had initially intended.

Here’s how.

How To Increase Your AOV

#1. Offer Product Bundles

#2. Give Tailored Product Recommendations at the Perfect Time

#3. Offer Limited-Time Deals

#4. Offer Free-Shipping Threshold

#5. Create a Customer-Loyalty Program

#1. Offer Product Bundles

Bundle products together to increase the number of items a customer will buy.

Create bundles where the client will end up spending less than if they had bought the items separately. It works best when you display the amount they'll save if they purchase the bundle vs purchasing the products individually.

When you bundle products, you increase that purchaser's perceived value. Create all-in-one solution bundles that ease the pressure of decision-making on the customer. 

For example, if you sell pet products, offer starter kit bundles that include pet food, treats, toys, litter, and a collar for new pet parents. 

Get creative and build different packs for customers in various stages and needs. Examples include: 

  • Starter kits
  • Gift bundles
  • Related product bundles
  • Subscription packs

A good example is Skinny and Co's travel kit bundle that includes everything you'd need when traveling, from a shampoo bar to deodorant and lip balm.

The phrase "Live a chemical-free lifestyle" adds perceived value to the bundle.




Even a well-timed abandoned cart email offering high-value bundled products might be just the thing that convinces a customer to come back to their pending purchase. 

#2. Give Tailored Product Recommendations at the Perfect Time

Personalized product recommendations are closely linked to high AOV and revenue.

Salesforce says tailored recommendations drive 24% of orders. They also increase AOV by 10% in purchases where the customer viewed the recommendations.

Offer tailored recommendations based on the customer’s 

  • Purchasing and browsing history
  • Profile such as age and gender, location
  • The items they currently have in their shopping cart

It’s important to serve these recommendations at the right time (and place) when the customer is most likely to click on them and add them to their cart.

Recommendations are also a perfect opportunity to upsell and cross-sell products to increase the average order value. 

[fs-toc-omit] Cross-Selling:

Cross-selling is selling complementary or related products that satisfy an additional need. Offering these products when the customer is making a purchase presents a unique opportunity that they’ll consider buying them.

For instance, if a customer bought a phone, you can recommend a screen protector or a cover that fits the phone’s model.

[fs-toc-omit] Upselling: 

Upselling, on the other hand, is persuading the buyer to purchase a premium or upgraded version of the item they originally intended to buy. The higher-end products are usually more expensive, thus increasing their order value.

People associate higher price with quality, so present the product you’re upselling as better quality than the one they are considering.

For example, “For just $50 more, get double the phone storage and better camera quality”. 

You can recommend various products, such as:

  • Items frequently bought together
  • Products other customers purchased or loved
  • Best sellers
  • New arrivals
  • Top-rated products
  • Package deals
  • Related products

Timing and personalization are key for effective recommendations. Craft tailored suggestions to the right customers at the right time and you can encourage them to spend more on each visit.

One of the best places to achieve this is at the checkout page. 

Suggest products that complement their purchase using a post-purchase offer. This is a great way to improve AOV with a last-minute product recommendation.

easy way to increase AOV with post-purchase offers

#3. Offer Limited-Time Deals

Sometimes, time-sensitive deals are the push a customer needs to purchase items that they may still be undecided about.

Limited-time offers create a sense of urgency by building the perception that the products are in limited supply or are discounted for a limited time.

Capitalize on your customers’ fear of missing out through scarcity marketing, and you might just help someone stuck in an indecision loop.

That is why Black Friday and Cyber Monday sales are so successful.

These deals include countdown limited offers, flash sales, first-time purchase offers, one-time discounts, seasonal clearance, and sitewide limited deals.

And when you’ve created these offers, promote them to drive more sales and increase average order value by:

  • Adding psychological triggers to your social media headlines and email subject lines, eg., “Get these bestsellers before they are gone forever
  • Offering limited-time delivery.Using a countdown timer to drive urgency
  • Using urgency words and phrases, such as “Today only,” and “offer expires soon” 
  • Offering a bonus incentive like free gifts
  • Creating urgency-inducing popups

#4. Offer Free Shipping Threshold

Your customers love free shipping.

In fact, they are addicted to free shipping, and 62% of them won’t buy anything from you unless you deliver without charge.

So offer them free shipping with a threshold.

For example, “Free shipping for orders above $130.” Set the threshold at a point above your AOV but not too far above.

You want customers to add a product and spend more than they originally intended to, but it should not be too expensive as it might be out of their reach.

An ideal free shipping amount is 30% above your AOV. So, if your average order value is $200, a 30% increase would bring the threshold value to $260.

You can then offer free shipping on all orders above $260.

Encourage them to reach the threshold by displaying their progress and showing them how close they are to unlocking free shipping.

Here’s an example from Bombas.

increase AOV like Bombas

Bombas offers free shipping on orders of $50 or more. When adding things to the cart, a little bar shows up showing how far I am from unlocking free shipping on my order. 

Customers would prefer to buy more items and “gain” free shipping than “lose” money on shipping.

And with 48% of buyers willing to add items to their carts to reach the threshold, you can easily increase AOV by setting a minimum spend.

#5. Create a Customer-Loyalty Program

customer loyalty programs increase AOV

Customer loyalty programs aim at rewarding loyal customers. 

Show them appreciation by offering rewards such as coupons and discount codes that they can redeem the next time they buy from you.

This will increase the likelihood and value of future purchases. Coupon statistics show that 38% of shoppers buy more than they originally intended to when they have a coupon.

A loyalty program also offers value to customers and helps you build strong relationships with them. This encourages them to return and spend more.

You can create a point-based system where customers can redeem points earned for products. Or a referral program where buyers earn rewards every time they refer someone to your business.

For extra exclusivity, consider starting a tier-based reward program.

Everyone wants to be a VIP—extra-special, extra-valuable. People always want what’s exclusive and rare and don’t mind spending more to get there. If you incentivize that status, usually through extra discounts or free or reduced shipping, your shoppers will buy more (and more frequently) to retain that status. 

Sell More to People Who Are Already Buying

Increasing your ecommerce average order value puts you one step closer to meeting your revenue goals.

Attracting new customers is essential. 

Getting your existing customers to spend more when they’re already ready to give you their money is an authentic bargain.

Leverage the power of these traditional yet ultra-powerful strategies, implement them, and see the results in your monthly revenue reports.

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Whitney Blankenship
Content Marketing Manager @ Drip