eCommerce Insights: Growing Average Order Value (AOV)

In e-commerce, there are a few big objectives that teams can work towards to grow their revenue. You either get more customers (grow the top funnel), get them to buy more frequently (offer & encourage recurring purchases), or increase their average order value (AOV).

In this article, let’s jump into AOV tactics & how to grab that free revenue right under your nose.

Some tried & tested ways of growing customer AOV is by: Using tiered thresholds to give customers a goal to reach, Working in upselling & cross-selling strategies, and Product bundling.

The main idea here is to reduce friction & add value to the customer, pulling a clear line of communication (marketing!) that shows you have other products and solutions available for them.

For those new to this strategy, a tiered threshold is essentially offering a reward in exchange for hitting a specific spending target.

It creates a simple trade-off: if the shopper perceives the reward (like free shipping or additional product) to be more valuable than the extra money they have to spend, they will almost always try to hit that goal.

A key word here is “Perceive”. As a business owner, you know that not all rewards are created equal in terms of your margins.

Some products or services are much easier for you to “move” or provide at a low cost, but to the customer, the value feels significant.

To maximize your Average Order Value without draining your profits, focus on rewards that have a High Perceived Value but a Low Internal Cost:

• The “Free” Service: Offering a free extended warranty or free shipping costs you almost nothing to deliver but adds tangible weight to the checkout total.
• The High-Margin Add-on: Instead of a flat discount, offer a physical product that has a high markup. A $18 product might only cost you $3 to produce, but to the customer, it feels like a $18 win.
• The Convenience Factor: Features like “Priority Processing” (moving their order to the front of the line) can be a powerful threshold reward that costs you nothing but time and organization.

Got your creative juices flowing? Try a review of your existing offerings & see if there’s anything you can use to add value to the customer!

Up-sells and cross-sells are not new concepts; at their core, you are simply displaying and encouraging the customer to purchase a higher-end product or add-on related products to their existing choice.

However, the most successful brands don’t just “suggest more stuff”—they use specific psychological triggers to make the upgrade feel like a smart move.

When setting up up-sells, focus on two primary concepts: Premium and Value-for-Money.

• Premium: Focus on the “best” experience. If the customer is looking at a standard pair of headphones, you show them the Noise-Cancelling Pro version. Appeal to their desire for quality, durability, or status. The message here is: “For just a bit more, you can have the best version of this product.”
• Value-for-Money: This focuses on the “smart” buy. This is most common with bulk sizing or subscriptions. If they are buying a 30-day supply of vitamins for $30, you show them a 90-day supply for $75. Even though they are spending more total, they feel they are “winning” because the price-per-unit is lower.

For cross-sells, focus on the ecosystem concept; accompanying products that make sense.

• Companion Products: This is about adding “companion” products. If they’ve chosen a premium yoga mat, the cross-sell is a carrying strap or a cleaning spray—items that make the original purchase more useful.

Bonus tip:
Pay attention to the price-to-volume ratio. A common strategy is to offer basic products at a very competitive price while higher tier products are markedly more expensive for those who can afford it.

Another way to grow Average Order Value is to position the price of basic products nearer to the enhanced version, making the enhanced version look like the smart choice.

To do this effectively, you should keep two core concepts in mind: Convenience and Value.

When you solve a problem for the customer—whether that’s a lack of time or a tight budget—increasing your AOV becomes a natural by-product of a better shopping experience.

• Convenience Bundle: Some customers don’t want to spend too much time deciding what’s good. This is common in the food industry, such as BBQ packages or family meals. Instead of forcing the customer to plan every individual item, you offer a “recommended choice” that handles the planning for them. They pay for the speed and simplicity of the decision.

• Value Bundle: This is the classic “Buy More, Save More” approach. Here, the customer gets a clear discount when products or services are bought together compared to purchasing them individually. The win for the customer is the “deal,” which justifies the higher total spend because the price-per-item has dropped.

Whether they are looking for convenience or the best bang for their buck, bundles make it easier for them to say “yes” to a larger order.

The next time you sit down to plan your e-commerce strategy, remember that you don’t always need more traffic to see a spike in revenue. Often, the easier & profitable growth comes from better engaging the visitors you already have.

Utilize these tips to work your current customer base and maximize the potential of every single checkout.