You may have decided whilst working from home in the last year that you want to start a home-based business. You created your website on the best website builder for your brand, traffic rates steadily increased, your social media strategy is working, and your follower count and engagement is better than ever!
But, your monthly earnings aren't increasing, they're plateauing. So, what's the problem?
There are a couple of reasons why your online store's revenue isn't growing, but most of the time it's down to your average order value being low, causing sales to flatten. To shift those sales upwards, you need to learn new ways to increase average basket size and you'll soon see sales increase!
What is average order value?
Average order value is the amount calculated by dividing your total revenue by the number of sales made.
For example, if your business's revenue for last month was £450 and you had 30 sales, your average order value would come to £15. There will be some carts that were higher or lower, but that is the rough average you can begin working on.
Why is increasing average basket size important?
First and foremost, it will take you fewer customers to make the same amount of revenue!
Just by employing a few helpful strategies, you can increase your average customer order size by targeting your current loyal customers and convincing them that your other products are worth investing in too! This way you don't have to spend more on enhanced external marketing, and you can nurture the customers you already have.
How to increase average order value
When looking to increase customer order size, some businesses completely throw values and brand ethos out the window in favour of profits - but don't follow in their footsteps! The better approach is to encourage cart growth that is both valuable to the customer and to you.
Personalise the experience
Lots of businesses personalise their customers' experience, making their brand more personable. Businesses commonly do this by showing customers their previously viewed items and products that they may like based on their purchase history.
But you can go a step further. Show customers that they matter to you by keeping note of their birthday or location and offer personalised discounts or offers based on that information. This way, you can tailor your brand to always be relevant to them.
Brands also do well when they provide personalised products and services which reward their loyal or paying customers. Take Spotify as a great example, their Discover Weekly and Annual Roundup features are created specifically for the premium customer and its popularity cannot be emphasised enough!
It may seem contradictory to offer a discount when you're trying to raise your basket value, but when customers see products in the sale, they're often more likely to spend more considering the perceived reduction of cost.
This works well when brands also offer a small reduction in price when customers buy more than one of a particular item. This can be very effective if you're a clothing brand that sells basic t-shirts in more than one colour.
Create product bundles
If you would like customers to purchase more or try items that aren't as popular, you can create bundles of products that cost slightly less than they would having been sold separately. By doing this, you can increase the perceived value of the product(s) being bought.
Although this won't increase your overall basket value by much, it will encourage customers to try more of your products and will improve their perception of your brand.
A great idea when creating bundles is to put together an 'all-in-one' collection that acts as a solution to a customer's problem.
For example, if you are a skincare company, you could put together useful regimens for specific skin issues. Your website then can suggest a grouping of products that will solve this problem and create useful product bundles in the process!
Cross-sell or up-sell
Upselling and cross-selling are important sales tactics to encourage customers to buy complementary or upgraded versions of products. However, it is important not to overuse these strategies as they can be detrimental to sales.
When up-selling or cross-selling make sure you:
- Sell as you would to a friend: No one likes being sold to, so try to recommend items to customers in a friendly and helpful manner.
- Only offer relevant products: When a customer is viewing a product, for example, a pair of socks, don't offer them a fantastic handbag that would 'go perfectly' - keep it relevant!
- Offer low-value offers: offering low-increase products to add or upgrade a basket selection will increase the likelihood of purchase
- Try post-purchase up/cross-selling: offer customers similar products after purchase or via email and use this data to see if they will be interested in future purchases
Set up a free-delivery threshold
Very popular amongst eCommerce businesses, offering a free-delivery threshold enables brands to expand their basket size and increase profits by using a discounted delivery service. This way, the increased order value translates straight to profits and shipping is kept affordable!
Many online brands choose to partner with us at Interparcel as we can offer affordable shipping with reliable, premium courier brands. We've negotiated some of the best prices on the market with our delivery partners so that single-senders and businesses alike have access to parcel delivery that won't break the bank.
If you're interested in integrating your business with us at Interparcel, we offer a range of benefits that can help your business grow and improve your customer experience. Some of these are:
- Free account set up
- Parcel Presets to shortcut package detail input
- Access to a range of eCommerce integrations through our Shipping Manager
- Full use of our 'Send Again' and 'Return Parcel' actions to streamline sending
- Branded Tracking for a seamless company experience
- Unlimited no-cost label printing options
Make time-sensitive deals
Creating a sense of urgency is an excellent way to harness consumer psychology and increase your average order value. No one likes missing out, and the fear of this encourages customers into buying products that have a set deadline for discounts and offers.
Limited-time deals are a simple means of increasing basket value as customers will be acutely aware that your excellent discounts won't be around forever! If you have a website you can simply apply a date next to your sale banner or even add a ticking timer that appears on all of your product pages.
Create a live chat feature
Live chat has become increasingly integral to online shopping in recent years as the immediacy of buying has enticed more consumers to browse on the web. Chatbots and instant chat features have enabled brands to reassure and answer customer questions that build their confidence to buy. This is key when selling expensive items like mattresses or large furniture. Customers may need more specific measurements or information to make sure their money and effort are not going to go to waste. Live chat can have these customers reassured and ready to buy instantly, which will inevitably increase your monthly intake.
At Interparcel we've found our live chat feature very useful, as often customers need updates on their orders and information about sending. Our parcel delivery experts are always prepared to answer questions from 8 am - 8 pm Monday to Friday and between 9 am - 1 pm on weekends - get in touch!
We offer a wide range of courier services and some of the best prices around. We can deliver your parcels to over 200 countries around the world and help you with any queries you may have. Get a quote today!