There’s a three letter acronym that can literally make your business skyrocket once you understand it.
In eCommerce especially, understanding how to make decisions based on these three little letters can be the difference between just “getting by” or blowing up. The good kind…not the kind with bombs and stuff.
You may be guessing that we’re about to discuss the importance of LTV (Lifetime Value). And that’s actually a good guess.
Knowing your customer lifetime value is essential…
But I want to talk about something else.
I want to talk about AOV.
AOV stands for Average Order Value.
Here’s how you calculate your AOV. Let’s say that last month your store did $20,000 from 1,000 orders.
To calculate your AOV you divide $20,000 by 1,000 and you end up with $20.
Your AOV is $20.
Here’s where tracking AOV gets fun…
Let’s say you want to go from a $20 AOV to a $25 AOV.
That would be over 20% growth taking you to $25k in a given month.
Most people who don’t understand AOV think they need to go out and buy more traffic. This could get you the number you’re after but it will also increase your expenses. Your net profit may be the same.
But what if I told you it was possible to increase your AOV without having to buy more traffic? You could add 20% at no additional cost!
Would you be interested?
Well, the way you get these kind of results is by adding Upsells, Downsells and Cross-sells to your store’s funnel.
What is an Upsell?
An upsell is anything that increases your customer’s cart value during their checkout process.
An upsell can come in the form of an Order Bump like we offer on Handsome Checkout (see below). This is an easy way to make a recommendation on a related product based on the product your customer is buying. But you can also make a general offer that would apply more broadly if you’re just using one primary checkout page.
// understanding upsells and downsells
The Order Bump occurs before payment is received. So you want to make sure you offer something that isn’t going to cause friction in that process.
Post Purchase One Click Upsells Are Best at Increasing AOV
If you really want to watch your AOV skyrocket, add post purchase one click upsells.
These types of upsells occur immediately after your customer has made a purchase. And this is awesome because that person has just made the decision to give you MONEY!
Once someone becomes a customer they are far more likely to spend even more with you. And the absolute best time to make another offer to them is when they trust you most.
Want to guess when that is?
Your customer’s highest moment of trust happens right after they’ve purchased something from you!
So with a Post Purchase One Click Upsell you’re able to sell more to each customer which in turn increases your AOV. And you do this without buying more traffic. You simply optimize for the customers you already have.
And because it’s a “one click” upsell, your customer doesn’t have to re-enter their credit card. There is zero friction.
For WooCommerce users you’ll want to check out our One Click Upsells product.
What is a Downsell?
A downsell is also something that can increase your AOV despite having the word down in the name.
A downsell occurs right after someone says no to your upsell.
For example let’s say that you offer a product for $100 as your upsell. If someone decides not to take that offer you can show them a downsell which makes the same offer but perhaps provides a payment plan instead.
This way you are still trying to capture the extra revenue and are not giving up just yet.
// cross selling techniques
What is a Cross-Sell?
A cross-sell is really straightforward. It can be either an upsell or a downsell.
When you use a cross-sell you are simply offering a product that you know your customer will be interested in based on the product they have either just purchased or have saved to their part.
For example, if you are selling fitness clothing and you have a customer checking out with a pair of yoga pants you might also offer them a deal on a top they can wear during their workouts. This is both a cross-sell AND an upsell.
The really great thing about all of these strategies, is they allow you to increase your Revenue without having to purchase more traffic. When you maximize the return you get on your existing customers you are truly getting everything you can out of all you’ve got.
That also happens to be the name of a book written by the great Jay Abraham if you’re interested in checking that out.
If you’re not using these strategies yet and you are on the WooCommerce platform it actually makes sense.
These options have not been available for WooCommerce users for some time. And that is uniquely what we do here it WooCurve. We build products that increase your AOV instantly.