No surprise: most DTC and Shopify brands leave money on the table every day.
Their store is a leaky bucket.
One big hole? Underoptimized AOV. Hereās how to fix it:
First some contextā
Amazon credits over 35% of its revenue to increases in average order value (AOV).
Imagine: a 35% bump in your revenue from traffic and customers you already have.
THAT's the power of focusing on AOV.
And yet most e-commerce retailers completely ignore AOV.
They treat AOV like an output of their money machine, not an input to it.
Why? I don't really know. Maybe driving traffic is sexier than trying to get people to buy more.
But by neglecting AOV, you are mos' def leaving money on the table.
Remember the Amazon statistic. Imagine if I told you that you too could be 30% bigger overnight if you engaged in some upselling?Ā If you had a nice order bump like McDonald's (you want fries with that)?
Let's take an example. AutoAnythingāthe brand we acquired out of AutoZone
Let's say the AOV is $300.
If we wanted to increase that AOV, we could think about what some of our top customers might value.
At AutoAnything, lots of customers buy suspensions.
We could, for example, offer a Suspension Install Advisory Service for $2,000. Customers who buy this service would receive a series of scheduled Skype calls with our techs.
On these calls we would get to know the client and his or her vehicle. We'd walk the customer through an installālive.
(Itās stuff our customer support team does anyway over the phone.)
Here's all we would have to do:
1. Spend a few hours putting up a new product page for the new service.
2. Present that page to all customers at checkout.
Done. In a day, we have formulated a great way to increase AOV.
Let's call this a Premium Service Upsell (PSU). Premium because it is high-priced, and service because it is not a physical product. I love Premium Service Upsells because they give most brands a very quick way to generate additional AOV dollars from an existing product lineup.
Does every customer have to take this offer? Of course not. Most will pass on it.
But some will bite. And we doesn't need many to bite on such a high-priced order bump to increase her AOV by 30%.
Here's the math: if only 4.5% of my customers add on the new $2,000 offer, we have increased our AOV 30%:
4.5% x $2,000 = $90 (which is basically a 30% bump on the original $300 AOV).
The beauty of these kinds of offers is that they compound. If we stacked on more PSUs, that AOV would keep going up.
You can see how increasing AOV 30% within a year is doable.
AOV. Optimize yours.
Comment š and Iāll flip you a podcast I did on how to max your AOV.