3 tactics to increase your average order value. Thank you so much for investing and continuing this discussion on how to maximize customer lifetime value. At this point, we’ve gone through what customer lifetime value is broken down the Cal formula and identified three ways to increase customer lifetime
value in this segment. We’ll dive into the first way to increase customer lifetime value by breaking down 3 tactics you can use today to increase your average order value. The three tactics to increase your average order value are to test price increases wisely.
Focus on advanced sales strategies and smart discount strategy, starting at the top. We are assuming that you are providing products or services that solve a problem that your customers want or need and that you are serving your customers with a brand growing in recognition and service that is already
at or above par across the board. Now to get on with it. When we test price increases wisely more really can be merrier. If you have to SKUs that are the same product with slightly different features like size or color test the price difference on only one SKU
to see what impact it makes. This will allow you to test pricing sensitivity. Once you have an understanding of immediate sensitivity or quite likely lack thereof to evaluate the cohort that sees the product and pricing with performance and reference to the most comparable SKU or historical metrics.
Are there any differences. Have there been any changes in behavior that are notable. Are the reviews equally as notable as usual. And lastly monitor returns. Did the price increase caused a spike in returns or is there any other evidence and decreased satisfaction.
If not, it may be time to test further or modify prices across the board. Can you smell the extranet profit coming in next. Let’s focus on advance sales strategies in this first example incentivize with rewards programs by creating implementing
and proactively managing a rewards program. You can magnify the perception of your brand to your customers while also receiving customer loyalty by giving customer loyalty customers and loyalty programs tend to purchase at a higher average order value purchase more often and are more likely to become
brand advocates in the second example. Try a low cost, high perceived value gift with purchase while maintaining a minimum order value. If your brand has cultivated its audience and aligned values with your audience adequately this can provide huge results for increasing average order
value while also giving some social credit to your customers, who take advantage for this third example utilize Facebook dynamic ads for retargeting. While Facebook dynamic ads are an investment they’re also an opportunity to target users based on how they engaged with specific products or pages on your Shopify store.
Dynamic ads not only help reengage previous site visitors and to bandannas but also turns Facebook into an impactful e-commerce channel and can increase average order value. Lastly on the far right, you can utilize the advance sales strategy of a nominal offer with a minimum purchase requirement
when discounts are less typical having a discount gated by a higher purchase enables you to maximize your customer lifetime value by increasing your average order value. And last but certainly not least. This folds us perfectly into smart discounting strategy
similar to gift with purchase or minimum purchase requirement. This first example on the left of tiered discounting through a buy more save more offer can get customers processing higher value carts across the board. In this example, it’s $5 off $20 spent $10 off $40 spent or $20
off $80 spent encouraging customers to save more by buying more and increasing your average order value to boot. The second strategy is offering discounts with the advertising copy focused on up to verbiage. By having up to verbiage you can discount your items
in a range of manners or not at all while enticing shopping behavior to start perhaps with other high average order value strategies available. Once the customer is site and lastly slash pricing there is something special about a line crossing at a higher price that is motivational
and drives curiosity on what else may have slashed pricing. While possibly not always focused on average order value slash pricing can drive sales activity by getting a foot in the door for other tactics as well. And that sums up our three tactics
to increase average order value. Whether you’re immediately going to test price increases wisely focus on advance sales strategies like loyalty minimum order value and gift with purchase or apply smart discount strategy like tiered discounts on sales and promotions. I know you’ve walked away with some nuggets
you can apply today. I hope you’re as confident as I am that by applying one or more of these strategies you’ll easily be able to increase your average order value to enable the incredible multiplying power of customer lifetime value to earn additional net profit per customer you serve.
