There are many indicators that every online store owner should regularly monitor. Of course, different kinds of stores need to track different measurements, but one of the main would be the average order value.
What is the increased average bill?
The average bill is the standard amount of money customers spend on your store, it shows how much revenue each order can bring.
- It is one of the fastest ways to make more profits.
- It is a cheaper way than attracting new customers.
To measure AOV(average order value), as a rule, consider the ratio of income (Revenue) to the number of orders (Transactions):
AOV = Revenue / Transactions
It is the easiest way, and it works. But there is another one.
AOV is the product of the number of goods in the order (Average Number of Items - ANI) and the average cost of one product (Average Item Price - AIP):
AOV = ANI x AIP
Both formulas are correct and do not contradict each other. So you can count as you like. The main thing is not to forget to do it. Now let's look at how you can influence the increase in this indicator.
- STEP 1. Encourage purchases with loyalty cards
- STEP 2. Sell items in sets
- STEP 3. To offer a gift or product with the purchase of a certain amount.
- STEP 4. Additional services
- STEP 5. Happy Hours Method
- STEP 6. Implementation of cross-sales
- STEP 7. Motivating of employees to increase the average stores total
- STEP 8. Price Optimization
Rewarding customers who choose to spend more is a common practice to generate more revenue. The idea is simple because you allow your customers to save. And, they add more products to the cart.
For example, in December, many food chain stores use the stock.
"For regular customers with a purchase of $ 300, a $ 50 coupon is provided for the next purchase in January."
Since January is the traditional month of recession for supermarkets, a voucher helps increase sales or at least keep the average check size stable.
More often, stores offer various discounts on loyalty points for customers. For home goods stores, electronics, and technology stores, a popular strategy option is free delivery of an order from a certain purchase amount.
Selling goods in blocks, in packs is an option to increase the average total. If you have a grocery store or a cosmetics store, you can easily create blocks of goods and offer a discount of up to 10% per block.
For example, in a grocery store, customers will purchase small wholesale biscuits, pasta, baby food, juices, cans and pet food. In general, anything that has a long shelf life or that we often use.
In the cosmetics store, it makes sense with the help of a makeup artist to select sets of products for the colour type and type of skin, and then sell ready-made sets.
And for instance in the electronics store, to offer consumers a discount on a set of one brand.
Those extensions could help you to organize easy one of this ideas:
Many buyers can not just walk out from "bonuses". And they will impulsively buy three products if they see the "3 for the price of 2" promotion. The cosmetics store offers a free product that comes with the kit: "When you buy facial cleansers and makeup remover, we offer a mask as a gift."
Check out the details of the Magento 2 module PROMOTION MESSAGE . It can be useful for your business.
Many firms provide very similar sets of goods and services. But they can provide their customers with additional services, guarantees, programs, and conditions that add value to the main product.
For example, when buying bulky equipment, customers have the opportunity to order delivery to high floors to the apartment. Sometimes stores offer an additional guarantee on the goods.
Lure customers at certain hours and sell them something with a discount at this time. The "happy hours" method is used by bakeries to sell goods that the owner will write off the next morning. However, this method of increasing sales is also suitable for stores of other categories. Since a time-limited discount or promotion forces customers to act impulsively.
Having entered the store and seen the "happy hour" promotion, the buyer first goes to the cashier with the promotional goods. And then he decides whether he needed this purchase. You can set automatic discounts on a schedule using the Magento 2 SALE COUNTDOWN module.
Cross-selling is not a new way to increase store sales, but it still works. The essence of cross-selling is to offer product add-ons. Option for cross-selling is the implementation of an additional assortment to the client. For example, it can be an offer to supplement the purchase of a smartphone with a protective glass and a case.
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You can share the concern about the growth of the average check with your employees. For example, in a clothing store, reward your consultants for sales whose average bills are more than $ 300. However, if you have inexperienced sellers, it is best not to rely solely on their initiative.
The ideal option is to practice with sellers on how to offer additional goods and services in the store. You can also write and fix scripts in service standards to increase the average revenue and teach your sellers how to deal with customer objections.
Sometimes a trivial price review helps to increase the average store check. For example, if competitors have long been selling this product at 20% more expensive, you can increase the price by 10% without affecting the number of purchases. If you are selling something exclusive, remember that the price of a product can increase subjective value.
Updating prices can take only a few minutes using the Magento 2 BULK PRICES UPDATER module.Most of the above methods will help store revenue growth. However, there are additional methods that we will talk about in our next article.