Ways to improve your Average Order Value and consumer psychology behind it
There’s no need to beat around the bush: as a business owner, your main goal is to make as many sales as possible – and to make as much money as you can from every sale you make.
This guide is for you if you’re looking at how to increase cart size by understanding consumer psychology behind it.
But first things first, what is an average order value?
What is the average order value?
The Average Order Value (aka AOV) refers to the number of orders per shopper over a specific period. Simply put, AOV tells you how much revenue every order brings in.
To find your average order value use this simple formula:
Average Order Value = Total Revenue / Number of Orders
Now that you have a better idea of what AOV is and how to calculate it, let’s talk about how you can improve your AOV with these strategies.
Make personalized product recommendations
When done right, personalized product recommendations can drive more sales while increasing productivity, which, in turn, will boost your average order value to the next level.
While there are several aspects go into an effective product recommendation campaign, your main concern should be on providing extra value to your customers.
Look at the following examples:
Asos combines two product recommendation boxes on the product page to maximize the experience. When a customer is looking at the kilt, Asos recommended kilts in new colors or styles (“You May also like” box). Additionally, the company encourages customers to “buy the look” suggesting a bag, a top, and boots.
The psychology behind consumer behavior: You probably interact with recommendations every day. And you don’t mind getting these recommendations. The reason is that they help you discover more products of the kind you like. It also helps make your first purchase better – for instance, it’s the jewelry, the cardigan, the shoes to go with the dress.
Personalized product recommendations can be implemented using Recom.ai – Upsell & Cross-sell. With the app, you can do cool things like:
- Highlight Best Sellers and Trending stuff
- Introduce your New Arrivals
- Promote related products at the moment of purchase
- Offer alternatives at the same price point
- Place your recommendations on every single page of your store (but we advocate a “quality over quantity” approach and recommend putting them subtly) and more.
The best part? You can put recommendations in just three steps:
- Define related items via a flexible rule system or leave it for our automation algorithms;
- Customize the look of your widgets, if default templates don’t suit you for any reason;
- Choose the pages where cross-sell widgets appear.
That’s it. Recom.ai will generate recommendations for products that your customers are likely to buy, saving you all sorts of time and effort.
Bundle products together
One tactic companies sell more products is through bundling – when brands package several items together as a kit for a lower price than they would charge customers to buy each item separately.
Business owners use this tactic to move a product that isn’t selling well by pairing it with a trendy product.
One famous example comes from Sephora, which has bundled products that make sense to be recommended together, like a serum, a primer, and a highlighter.
The psychology behind consumer behavior: The customer can see the original price these products would cost to buy separately, they can quantify their savings. This lets them know that they are making a smart decision and saving money, while a merchant sees an increase in average order value.
Increase cart size with in-cart upsell offers
Upselling is described as encouraging customers to buy something that makes their initial purchase more expensive. Success is inextricably linked to customer delight, so the key lies in convincing your customer that your recommendation for extra purchases will be of real benefit to them.
Kiehl’s displays high-priced alternatives on the shopping cart page via a pop-up that is triggered when a customer adds a product to the cart:
The psychology behind consumer behavior: This sales technique is similar to what happens at Macdonald’s. You order a cup of coffee. While you’re placing an order, the attendant asks “Would you like XXL of that?” And honestly, why wouldn’t you be: you’ll have more coffee + a bit of lavender syrup. Additionally, it costs only marginally more than the cup of coffee you were about to purchase.
With Recom.ai – Upsell & Cross-sell, you can create an in-cart upsell pop-up that’ll help you make more sales and boost revenue from your e-commerce store. Here’s how you can create an upsell pop-up like this one with our app.
Re-merchandise your product and homepage
Merchandising is not only about a brick-and-mortar strategy. Consider remarketing your homepage and product pages if you want to increase your average order value.
A good way to start is by revamping your homepage, placing new arrivals or popular products front and center.
You can also revitalize any product pages, highlighting products that customers would likely buy anyway and placing them above-the-fold:
When somebody is about to buy a bed frame, a “Must be completed” box suggesting a bed base is effective. In this example, a product recommendation box at the top of the page is inconspicuous enough to not distract from the experience but still a note that a given product must be supplemented by a particular item.
The psychology behind consumer behavior: Your customers used to see your page as it is. When you change something, you draw attention to your promotion, accessories, add-ons, or popular related products.
Wrapping it up
With the strategies, you’re not pushing customers to make purchases. You’re only using psychology to nudge them to explore more products. So while you’re helping them get the best deals, discounts, and products, you’re getting sales with a higher average order value.
A win-win situation.
Ready to see your sales rise? It’s time to get started on implementing some of these strategies!