In the competitive realm of digital product sales, maximizing the value of each customer is essential for growth.
By understanding how to calculate and increase Average Order Value (AOV), you unlock the power to boost revenue while reducing the costs of acquiring new customers.
But what exactly is AOV, and is it the only metric you need to worry about?
(Spoiler—it's not the only metric you need to understand, but we'll make learning about those as painless as possible).
Below, we’ll explore what average order value is, how it's calculated, and other metrics you need to take into account. We'll also share eleven strategies to increase average order value and find out how Checkout Page can help you boost AOV.
Understanding Average Order Value
Average Order Value is a key business metric measuring the average amount your customers spend with you. AOV is calculated by dividing your total revenue by the number of orders placed over a specified period.
For example:
If your platform has a total revenue of $4,500 from 100 orders, your AOV would be $45 ($4500/100 = $45).
This means that, on average, each customer spends $45 when they make a purchase from you.
Knowing your average order value provides a general overview of spending behavior. It's an invaluable piece of baseline information when it comes to strategizing ways to increase revenue and measuring their success.
Benefits of increasing average order value
This seems kind of obvious, right? However, there are some good reasons why focusing on boosting AOV is a powerful move, in addition to the fact that more revenue = a good thing.
- Cost-effectiveness: Acquiring new customers can be expensive; increasing AOV helps maximize profit from existing traffic, saving on customer acquisition expenditure.
- Customer retention: Businesses often create a better customer experience and foster loyalty by encouraging higher spending, so long as the encouragement to spend more is exercised thoughtfully and responsibly (otherwise, it can have the opposite effect).
- Improved profit margins: Higher order values often lead to better economies of scale and reduced shipping costs per item for physical products.
Understanding median and mode order value
While AOV is a vital baseline metric that helps businesses monitor performance, it’s not the only important metric to consider.
In some cases, AOV can be misleading if taken in isolation.
Here's how...
Median Order Value (MOV)
MOV represents the middle value of orders, providing a clearer picture of typical customer spending that isn’t skewed by outliers (like a handful of very high-spending customers).
Example Median Order Value calculation
9 customers purchase a subscription at either $30, $60, or $100
Arranged in ascending order, this looks like:
$30, $30, $60, $60, $100, $100, $100, $100, $100
The middle number in bold is the median value: $100
Knowing your MOV helps you:
- Identify spending patterns: Understanding the typical amount customers spend allows for better targeting of marketing efforts, product offerings, discounts, and free shipping thresholds for physical products.
- Enhance product pricing: Insights from your MOV can help create pricing strategies that align with what most customers are willing to spend.
Comparing AOV to MOV in context:
Imagine an online game platform that offers various in-game purchases ranging from $1 to $100.
If the platform takes a total revenue of $10,000 from 150 orders, the AOV would be $66.67 ($10,000 / 150).
However, when the team looks at their MOV, it turns out that this metric is skewed by a few customers who made the $100 purchases, leading to a misleading picture of what typical consumer behavior is.
Calculating that the MOV is $20, the team can think about introducing mid-tier purchasing options or promotions targeting this type of customer.
Mode Order Value (MoOV)
MoOV is the most frequently occurring order value among your customers.
Example Mode Order Value calculation
A total of 9 customers purchase a subscription:
2 purchase $30 subscriptions
5 purchase $60 subscriptions
2 purchase $100 subscriptions
Most frequent value is the MoOV:
$60 (appears 5 times)
This metric can guide decisions around:
- Tailoring promotions: Knowing the most common spending amount helps you create targeted promotions and bundles that resonate with customers.
- Fostering customer loyalty: By ensuring offerings align with the MoOV, you can create more appealing deals that encourage repeat purchases.
Comparing AOV to MoOV in context:
Imagine a digital art platform that sells artwork packs at various price points: $5, $10, and $25.
If the total revenue for the month is $8,000 from 400 orders, the AOV would be $20 ($8,000 / 400).
However, the MoOV shows that the most frequently purchased item is the $10 pack, so this price point appeals most to customers.
Knowing this helps the platform to tailor marketing and promotional strategies. For example, they could create bundle deals centered around the $10 item.
11 strategies to increase average order value
Now that we've looked at the nuances of the different metrics, let's see some of the most effective ways to increase these numbers and when to look beyond AOV when putting these strategies into action.
1. Optimize product and checkout page design
As creators of a high-converting checkout page builder, this is a pet topic for us!
A well-crafted product and checkout page is essential for a seamless customer experience; it minimizes cart abandonment, increases conversions, and creates effective sales funnels that all boost AOV.
Ensure that you create:
- Streamlined checkout experience: A clunky or disjointed checkout process can send your potential customers running for the hills. By simplifying the checkout process, you’ll minimize cart abandonment and increase conversion rates. To keep your customers happy, reduce the required fields, provide multiple payment options, and offer a clear overview of items and costs.
- Engaging product pages: Ensure that your product pages are visually appealing and provide all necessary information at a glance. If a customer has to hunt for key information, frustration kicks in quickly!
Include high-quality images, detailed descriptions, pricing options, and clear calls to action (CTAs).
- Creating a clear sales funnel: Your landing page should guide customers through a clear sales funnel, from initial awareness to final purchase. Each stage should naturally flow into the next, minimizing obstacles.
2. Implement cross-selling
Cross-selling is the practice of suggesting complementary products to customers during their purchasing process.
Here are some effective methods for digital product sellers:
- Smart recommendations at checkout: Integrate a section in your checkout process that showcases complementary products. For example, if a customer purchases a software program, suggest related add-ons, templates, or training materials that add value to the primary product.
- Product pages with complementary suggestions: Display related products that work well together on your product pages. For example, suggest relevant audiobooks or supplementary guides if a user is viewing an eBook.
- Bundling complementary bundles: Create bundles that combine core products with related products at a discounted rate. For example if you sell event tickets, you could package them with additional extras, such as access to exclusive areas or experiences.
3. Introduce Live Chat
Having live chat on your website can engage customers and encourage trust and peace of mind. Helping to address customer inquiries and concerns that may be a barrier to purchase is an effective way to build rapport and AOV.
Live chat helps boost AOV by offering:
- Real-time assistance
Live chat helps ensure that customers get immediate answers to their questions about your product offerings. Clarifying doubts—such as features, access duration, or compatibility—helps potential buyers feel secure that they are making informed decisions, particularly for high-ticket items or purchases that entail a commitment, e.g., a subscription. - Proactive engagement
Live chat enables you as a business to initiate conversations with visitors who are browsing your offerings. You can build trust and offer reassurance by assisting the customer regarding the product's suitability and may be able to recommend helpful add-ons.
4. Offer limited edition items
Offering limited edition items builds a sense of desire and urgency. It entices customers to spend more on products they don't want to miss out on, such as exclusive courses, event tickets, or unique membership discounts.
These time-limited offers create a sense of FOMO and can drive additional sales.
Here are some strategies for making it work:
- Create a sense of urgency
Be sure to emphasize the limited availability of exclusive products, whether it’s an online course with limited enrollment slots, downloadable content available for a brief period, or a subscription plan with restricted access, conveying a message that your offer is only available for a limited time will encourage your customers to increase their purchase size. - Highlight exclusivity
Emphasize the value your limited edition products will provide, such as specialized content, bespoke coaching sessions, or VIP event access. By framing these offerings as one-of-a-kind, customers may be more inclined to purchase higher-priced items.
This strategy boosts the perceived value and incentivizes customers to invest more.
5. Start a loyalty program
Create a loyalty and rewards system that earns your customers points for each transaction. For example, customers could earn points for purchasing downloads, enrolling in courses, or subscribing to memberships.
Framing the program in a gamified context can motivate customers to collect more points and unlock rewards. MOV will help inform the tier structure of your loyalty program, ensuring that reward thresholds are set to match what the average customer spends.
Ideas for reward strategies include:
- Tiered rewards structure
Create different tiers within the loyalty program that provide customers with increasingly valuable rewards as they collect points. For example, a customer could start as a "Bronze" member and gain access to exclusive content or discounts at the first tier. As they earn more points and progress to "Silver" and "Gold" tiers, they can unlock early access to new courses or personalized learning experiences. - Exclusive offerings
Customers can redeem their collected points for exclusive digital products, such as free or discounted downloadable resources or 1:1 coaching sessions. Making these offerings available only through the loyalty program creates curiosity and encourages customers to engage and spend more to join in on the fun! - Promote social sharing
Encourage customers to share or review your offerings on social media or refer friends to your platform to gain points. This boosts engagement and expands your customer reach, creating a community and buzz around your products. - Regular engagement and updates
Keep customers informed about their points status, upcoming rewards, and special promotions through regular email updates or notifications on your platform.
6. Offer discount codes
Offering discounts is a highly effective way to boost average order value. By using discount codes that activate at a certain spending threshold—e.g., 10% off on purchases over $75—you'll be encouraging customers to add more items to their carts.
When deciding where to set these thresholds, it’s important to look beyond just AOV because, as we've seen, it can be skewed by a few high-spending customers. Instead, consider what most shoppers typically spend.
By aligning discount thresholds with your typical customer's spending habits, you’ll create offers that are much more likely to appeal.
7. Implement upselling
Upselling is a technique that encourages customers to spend more per order by offering them a higher-end product or an upgraded version of the product that they are considering.
By using thoughtful upselling strategies—well-chosen related products that add value and make sense from a price perspective—sellers can increase their AOV.
Upselling at checkout
At the checkout stage, upselling involves presenting customers with options for higher-ticket items or premium versions of the products they have in their cart.
This can be implemented through several methods:
- Product recommendations: Display related premium products on the checkout page, highlighting their enhanced features and benefits. This tactic helps customers see the value in upgrading.
- Bundling products: Offer bundles that group complementary items together at a slight discount compared to purchasing them separately. This increases the total sale value and is convenient for the customer.
- Limited-time offers: Create a sense of urgency by offering limited-time upgrades or deals. This encourages customers to make quick decisions to enhance their purchase, boosting the AOV.
⚠️ A word of caution: While upselling at checkout can be effective, it carries the risk of cart abandonment if customers feel overwhelmed by too many options or perceive the process as intrusive and pushy.
Post-purchase upselling
Post-purchase upselling happens after the customer has completed their initial transaction. This approach carries zero risk of cart abandonment since the customer has already completed their initial purchase.
Methods include:
- One-click upsell offers: Immediately after the purchase confirmation, present an enticing one-click upsell for a premium product or additional accessories that complement their initial purchase. The simplicity of a one-click process makes it easy for customers to take advantage of the offer without any added friction.
8. Use urgency tactics
Creating a sense of urgency around the time available to gain access to a product can be an effective tool for boosting AOV.
Here are ideas on how to generate urgency:
- Limited-time bundles: Offer time-limited bundles that combine popular products at a discounted rate. Emphasize that these bundles are only available temporarily, motivating customers to take advantage.
- Countdown timers for upsells: Displaying a timer that limits the time for a discounted bundle or additional digital product encourages customers to take advantage of the offer before it expires, thus increasing their overall purchase.
- Flash sales: If you offer courses or membership subscriptions, launch flash sales that provide significant discounts for a limited time. Highlighting the urgency of these offers can entice users to buy more than one course or upgrade their memberships to access exclusive content.
9. Offer volume discounts
Offering volume discounts will encourage customers to purchase more at once, especially in the realm of ticket sales. Here are some ways of implementing this tactic:
- Tiered pricing for digital products: Setup pricing so that customers receive greater discounts as they purchase more items. For example, offer 10% off for two products, 15% off for three, etc.
- Bulk ticket purchases: For event tickets, provide discounts for group and family purchases. Encourage customers to buy multiple tickets by offering a reduced rate for purchases of five or more.
- Package deals: Bundle-related digital products or event tickets together at a discounted rate. This not only encourages higher spending but can also increase your customer's perception of value.
- Limited-time bulk offers: Promote time-sensitive volume discounts to generate urgency. Highlight the savings customers can make when they buy more within a specific timeframe.
10. Offer social proof
Incorporating social proof into your website is super important when it comes to building the trust and reassurance needed for customers to feel good about spending money with you, especially in the case of high-value or high-commitment items like annual subscriptions.
Here are some strategies for making the most of social proof:
- Display customer testimonials: Feature authentic testimonials from happy customers on your product and landing pages, with specifics about why they love your product and what problems it's solved for them.
- Utilize product reviews and ratings: Allow customers to leave reviews and display an overall star rating.
- Highlight best-sellers: Create sections that showcase your top-rated or best-selling offerings. This fosters trust and prompts customers to consider purchasing these popular products.
- Incorporate case studies: Present success stories from customers who achieved significant results using your products. These narratives help justify investing in additional or higher-priced items.
11. Provide winning customer service
Last but absolutely not least, ensuring top-notch customer support is vital for building trust, rapport, and loyalty in the short and long term.
Poor customer service and the inability to get answers to questions are key reasons customers give up on a product or platform.
On the other hand, great customer support will enhance conversion rates, encourage investment in higher-value products, and keep your customers coming back to you over the competition.
Key aspects of great support include:
- Prompt and accessible assistance
Offer multiple channels for support, such as live chat, email, and tickets, to ensure inquiries about your products are quickly addressed. - Knowledgeable support staff
Your support team or representative should be well-informed about the features and benefits of your digital offerings. This equips them to go above and beyond when offering customer support. - Proactive follow-up
Reach out to customers after purchase to ensure they have accessed their products and to address any questions. This follow-up shows you value your customers beyond the moment they part with their money. - Encourage feedback
Be open and actively seek customer feedback to improve products and support services. Acknowledging and addressing concerns transparently builds long-term loyalty and encourages customers to stick with you and spend more over time.
How Checkout Page helps you increase AOV
Checkout Page was built with simplicity in mind for you when creating checkout pages and for your customers who’ll use them to pay for your products.
We offer a wealth of features to help you implement the tactics we’ve addressed above, helping ensure you make the most of your customer interactions.
With Checkout Page, you can:
✅ Rapidly build no-code, high-converting checkout pages for your website that blend seamlessly with your branding.
✅ Enable fuss-free payment, minimizing abandonment by keeping required fields to a minimum.
✅ Crosssell relevant products at checkout and offer one-click upsells after purchase.
✅ Promote limited edition items and offer product variants and volume discounts on products and tickets.
✅ Add pop-up checkout pages, event pages, and form pages on your website to promote exciting offers.
✅ Rapidly create pages to promote last-chance offers on social media, in emails, and on landing pages.
✅ Create coupons and discount codes to encourage purchase
✅ Connect with our founder-led customer support team via Live Chat to address queries and ensure you get the most out of Checkout Page.
Checkout Page is incredibly simple to start using; once you’ve connected your Stripe account, you can start selling in minutes. Why not see for yourself by taking advantage of our 7-day free trial—no credit card needed.
