[MUSIC PLAYING] Today, I want to talk about increasing your average order value. So what is average order value? Average order value is an e-commerce metric that measures the average total of every order placed with a merchant over a certain period of time. Average order value drives key business decisions such as advertising spend, store layout and product, and what you're going to do in the future.
So think about it this way. If people are placing, on average, order of $1, can you offer them free shipping? Not really. But if they're willing to get their cart to $50, maybe you can offer them free shipping and you can nudge them, and that can increase the average order value, or you can even offer a $10 coupon for orders above $50. Now, the reason it's important to do optimization to increase your average order value is if you can't get it high enough, it's really hard to scale your e-commerce brand and-- because you can't do things like advertising.
See, Facebook ads, Google ads-- they all cost money. You need your average order value to be high enough. And that's why I recommend bundling products to create a higher average order value. So, for example, Skincare by Elena sells skincare products. If someone's looking to get less wrinkles, they may buy her anti-aging serum. And then when they're checking out, she may upsell and bundle together things like her vitamin C serum and things like her rejuvenation spray or something like that.
Sadly, I don't know all the products because I'm not that into skincare. But, nonetheless, you guys get what I'm saying. And when you bundle them, you get people to buy multiple products together. And they get a discount. And it creates a higher order value, which saves you money, as well, on things like shipping. And bundling is a great way. And Shopify apps-- you can use them to create product bundles. And you can go to that URL.
And it'll help you. And I also recommend upsells or cross-sells. So going back to the Skincare by Elena example, at Skincare by Elena, when you're checking out, what they do is, after checking on after you made the sale and you swipe, they'll offer you another sale right then and there. And whether you take it or not, they'll offer you another sell. Now, you don't want to upsell too much. I would think about it as a friend.
You want to do it-- hey, would you sell this to a friend? Would-- is this too aggressive? Now, is this a good deal? Will they get value from this? And you want to test different offerings. And then you can also find apps on Shopify for upsells and cross-sells as well. I also recommend that you set up a loyalty program. It's really expensive to acquire a user. It's cheaper, more economical, to make more money from the same customer over and over again.
That's why Amazon's such a big e-commerce company. Consider creating rewards. Now, whether you give them discounts or whether you have subscriptions, it's up to you on how you do the loyalty. You can figure out what's best for you and best for your customers. I recommend that you also talk to them. And when you talk to them, it'll give you idea. And some feedback is-- you just go with your live chat team or, if you're doing it yourself, talk to people and get feedback as you're doing that to figure out how you can create loyalty programs as well.
And when you're talking to people, find out what issues people have, what objections. And that'll help you figure out how you can adjust your copy, your images, everything you need on your pages to maximize your conversion rate so you generate more sales. [MUSIC PLAYING]
