The neglected revenue raiser
There are 3 principal ways to increase revenue on any ecommerce site. The first two, increasing traffic and increasing conversions get the most attention from ecommerce site owners. Many ignore the third way - increasing your customers' average order value. Yet this can be a simple, low cost way of increasing your bottom line, which you can often do yourself.
When customers come to your site, you want them to spend as much money and buy as many items as possible. It is easier and requires less effort on your part to have one high value customer than two low value ones.
The ways to increase your order value
1. Up sell
Up selling means persuading your customers to buy a similar, but higher priced item. The easiest way to up sell is to offer alternative products on your product pages, showing the next few similar, but more expensive products. On most ecommerce software, alternatives are built in and can often even be automated, such as by selecting products from the same category or manufacturer.
2. Cross sell
Cross selling is when you offer your customers related products that they buy at the same time, for example an HDMI cable with an HDTV, or the matching earrings to a necklace. Cross selling can be done in two ways. The first is automated and is "customers who bought this also bought..." The second, preferable method is manual. You must set up the associated products yourself. The most important thing is to make sure that the products really are related and the user of one would also need or desire the other.
3. Staff training
Make sure that your staff are properly trained, with good product knowledge so that they can both up sell and cross sell when on the phone to customers.
4. Product bundles
A product bundle is when you sell two (or more) products together, for slightly less than their combined value. It is another way of cross selling, whilst at the same time, appealing to the customer's sense of getting a bargain. Hampers or gift boxes can also work as a sort of product bundle in certain holiday seasons such as Christmas.
5. Free Delivery over a certain amount
Don't underestimate the "perceived value" of free shipping. Customers will often be prepared to spend more than the shipping cost, to qualify for free shipping. If you can, let your customers know how close they are, for example "you only need to spend another 10 pounds to qualify for free shipping". Offer some suggestions for products of the right value. If, for example, your average order value is £50, you could try offering free shipping from £55. You just need to ensure that you make the free shipping threshold at a profitable level.
6. Discount over a certain amount
Offer a discount when customers spend a certain amount. This can be in either a monetary or percentage form. For example, spend £50 and get 5% off. Again, you are working on a customer's perceived value - that they're saving money, when in fact they are spending more to get the discount.
7. Offer cash back over a certain amount
Similar to the discount above, cash backs are great incentives for encouraging customers to spend more. The popularity of cash back sites means that you should definitely examine this as an option.
8. Feature high value products
Ensure that your high value products stand out on your site and aren't hidden away. Make full use of featured products in categories for those products that you want to sell. Promote those products which are high in value and provide good returns for your business.
9. Add new products to your site
It may be that there are products available that compliment yours, but you're not selling them. Check your internal searches and analytics to see what customers are searching for. Contact some of your customers and ask for suggestions about what else they should sell. Ask your staff what products customers speak to them about that you don't stock. Then cross sell and up sell them.
10. Put up your prices
It may sound like a joke, but the quickest way to increase the value of your orders is to raise your prices. Be careful as you don't want to drive your customers elsewhere, but you should be constantly reviewing your competitors and supplier prices. You can even charge more than your competitors, but you must demonstrate why you can (better service etc).
11. Volume pricing
Offering cheaper prices when customers buy more of a product can persuade them to buy more than they were going to, again appealing to their sense of 'getting a bargain' when they are in fact spending more.
12. Gift wrapping
Offer gift wrapping as an additional item during checkout and you'll be surprised at how many customers will purchase it, when the item that they are buying is a present. This works particularly well at holiday times, such as Christmas.
13. Recommendations
You can offer recommendations to returning customers. These can be in one of two forms - personalised recommendations, such as those used to such excellent effect by Amazon, which entice customers to buy products they didn't even know they wanted; and expert recommendations. The power of influence is massive, especially if recommended by a known name in an industry.
Test, test, and then test some more
With any online marketing effort, testing is the key. What works for one website, one product category and one type of customer may not work for another. You should experiment with different pricing, promotions and products until you find the right combination to boost your order totals.