Regardless of which platform is used to develop an online store the owners always wish their business to be as profitable as possible. Magento specialists share the ways of increasing the average order value in Magento and the steps necessary to be taken by the users.
What "Average Order Value" is
The Average Order Value is a sum of money that your customers are ready to spend regularly. Any store owner, whether their business is online or it is a physical store, must know that sum in order to adjust to its increasing or reducing in time. This factor is directly proportional to the efficiency of your marketing strategies. If you have chosen a correct promotion scheme your average order value will grow. If not then your monthly customers' orders sum will remain the same or reduce.
It is worth mentioning that increasing the average order value is one of the simplest strategies of successful business. It is very difficult to always increase new clients' base and it is much faster and more convenient to make the existing clients buy more. There are several positive moments in this scheme:
1. You are insured against season traffic reduce. Of course, if your store sells swim suits you will have less orders in winter but generally the average order value will stay the same as in summer;
2. The system does not require large financial investments;
3. You better understand your customers, you know what they need and what they do not usually buy, etc.
Ways of increasing your average order value in Magento
In order to increase your average order value per month you do not need to perform any unusual actions. The following simple steps will be enough:
1. Group your products correctly. Depending on the store directivity you can use various products grouping schemes. For instance, offer ready sets or clothes at once. A cell phone can go with headphones and cover in a set, and in case of apparel, a set may include a dress, a handbag, shoes and accessories. In order to attract attention to your sets of products (containing several items) you may offer discounts or other privileges for them (free shipping, promo codes for further orders, etc).
2. Use Up-Sell and Cross-Sell products. Always offer your customers additional products even if they are not related to the items they order. E.g. most customers believe in the strategy of "better quality for higher price", so offer them similar but more expensive products (Up-Sells), or return to the Cross-Sell products.
3. Offer discounts and bonuses to your customers. Many large online stores actively use this strategy and it helps them to increase their sales significantly. You can make sale days or offer discounts to subscribers. Various bonus programs are also very successful (e.g. a client made an order for $100 and he receives $10 bonus for the next purchase). You can also offer your clients additional services or discounts if they make a wholesale purchase or order a set of products at once.
4. Monitor the requirements of your clients. You must know their wishes, this pleases them a lot. When they open your site it is desirable that they see recommended products, you may use special Magento extensions to add that option. Let’s say a customer likes smart phones, so you can offer them brand new phone models. Another very efficient system is build on determination of customer’s geographical location and considering climatic data of specific regions (this system especially suits for online stores selling clothes).
5. Develop a precise refund system. Any customer will trust your store more if you have strict rules for return or replacement of products which did not fit customers for some reasons, and refunding costs to customer’s credit card. Try to make this process as easy and fast as possible and do not create time-consuming schemes of filling papers.
You may learn more details about this subject in the book “Five Strategies for Increasing Your Average Order Value” written by Magento development. We would highly appreciate if you share your comments about increasing average order value in Magento.