I had a Repeat Customer Insights customer asking about how to increase their order sizes and Average Order Value (aov).
Most optimization ideas revolve around giving customers an incentive to order more than usual.
Tactic #1: Target the low-spenders
To move your Average Order Value up, you can target your low-spending customers. If they order more in each order, the average will increase.
Using RFM target customers with a low or average Monetary score (1-3). Use campaigns that offer incentives around ordering more than your AOV.
Tactic #2: Target the high-spenders
Getting your high-spenders to spend more will also move up your Average Order Value. They have more potential to move the needle (i.e. they have no upper limit) but they might be less responsive to incentives.
In RFM, these customers have the higher Monetary scores like 4 or 5.
Tactic #3: Bundles act as great price frames
Bundling products can be a great way to frame a higher price as typical.
If your AOV is say $50 but all of your bundles start at $65, that might convince customers to buy those bundles instead of only spending $50.
You will need to make sure the bundle benefits the customer of course. Either give them a great deal, offer something unique, or make the bundle a time/decision-saver ("all these fit together").
Tactic #4: Incentivize combining smaller orders into larger
Sometimes people will place multiple smaller orders which drags down Average Order Value. Convince them to make fewer, larger orders and your AOV will increase.
The problem is that ordering less frequently might mess with their behavior or even cause them to delay purchases. Use caution and stop the incentives if you see the Customer Purchase Latency trending too high.
A subscription offer can be a strong incentive here, especially if you can offer non-standard terms (e.g. every other month, every three months).
The "free shipping on $50+" is the classic example but you can also add in free products at different spending levels too. e.g. spend $50, get a $5 product for free. Spend $100, get a $10 product for free.
If you can make them automatic during checkout, then you don't have to bother with coupon codes or risk codes getting shared. Shopify Checkout Scripts, Shopify Functions (new version of Checkout Scripts), or even Shopify Flow can be used to add discounts or incentives to their orders.
When you're setting the levels the incentives kick-in, make them just above your current Average Order Value. So if your AOV is $65, make the first level start at $75. That'll move your AOV up towards $70 ($75 - $5 bundled product or coupon).
Working on your order sizes and Average Order Value is a great optimization for both your new customer acquisition and your repeat customers. Done right it can improve customer behavior across your entire store.
Just make sure to monitor your order volume and customer retention metrics with Repeat Customer Insights. Pushing AOV too much can damage loyalty and cause customers to defect.
When are your best customers defecting?
Are your best customers defecting? Use Repeat Customer Insights to find out where in their lifecycle you're losing them and what you can do to win them back.