This is a continuation of our series to help you increase your Average Order Value. If you haven’t seen it, please read part 1 where we talk about how free shipping can be used to increase AOV.
In part 2, we’ll focus on grouping products together to increase average order value. All three options below rely heavily on customer experience and require some creativity and testing.
Increase your Average Order Value Tip 2: Volume Discounts, Bundles, and Add-on Items
Make it clear to customers that if they buy more of the same product at one time, they’ll receive a volume discount. To make this discount effective, you’ll need to strike the right balance between customer savings that are appealing and a discount that doesn’t chip away at your revenue. In an example from Visual Website Optimizer, London-based office supply company, Paperstone, increased their average order value by 18.94% with an increase of revenue of 16.85% on the volume discount products.
Bundles of products
Bundling products together is a great way to remind customers of all the other items they need to go with their main purchase. It takes some effort to set this up, as bundled products are complementary to the initial item selected, not similar. For example, if a customer buys a barbeque, they won’t want to see other barbeques, but might be interested in buying outdoor furniture or grill tools. Often, retailers bundle these together by saying, “Customers who bought this, also purchase these other items.” Magento offers a frequently bought together plug-in for this.
Add-on items are items that are too small to affordably ship on their own. Once a customer commits to purchasing something that covers the cost shipping, they are eligible to “add-on” these smaller items. The best example of this is Amazon Prime. If a customer buys one thing from a retailer, they will see a list of add-on items that now won’t cost the retailer any more to ship.
Volume discounts and bundles can be a creative way to encourage customers to buy more, but you have to make sure you’re tracking the impact. Track how these incentives change customer behaviour in your dashboards and make adjustments based on the results.
This is the second post in our series of increasing your average order value. If you would like to learn more about how to increase your average order value, download the whitepaper today!