For many e-commerce businesses, increasing traffic is the holy grail. But is this the best approach? In fact, focusing instead on increasing your average order value for existing customers can be a more cost-effective approach.
In our 2013 e-Business Benchmark report, we found that for an average business converting 7% of their website browsers into buyers, increasing conversion by just 1% would be the equivalent of increasing traffic volume by 16.6%.
So just how do you increase the average order?
1. Free shipping – Removing delivery charges is a sure-fire way to encourage your customers to part with their cash. Not all businesses can afford to offer this so a ‘threshold’ amount can be wise and entice customers to spend more.
2. Bundle offers – Bundling products or services together creates the perception of increased value and allows you to improve your profit margin.
3. Up-sell – Up-selling is simply encouraging the customer to buy a more expensive version of their original desired purchase.
You can do this by focusing on the features the up-sell product has that are lacking in the original, or by highlighting ‘new’ or ‘just released’ products.
4. Cross-sell – You can also suggest additional products to accompany a customer’s initial purchase. You can do this with
“Customers who purchased this item also bought…” and “Must-have accessories include…” type features.
5. Loyalty points – Offering loyalty points on high-value orders not only encourages shoppers to spend more but also makes customers more ‘sticky’ meaning they are more likely to return to your shop. Companies such as Webloyalty have made loyalty schemes more accessible to businesses of all sizes.
Of course, delivering a great customer experience is key. You only want to suggest suitable products, tailored to each customer and what they’ve viewed. Too many options create confusion and harm effectiveness.
Ultimately, every shopper is different. If you decide to use any of these techniques, it’s crucial to test each and track your conversion rates to see which is the most effective at enticing customers to part with their hard-earned money.