AOV is the average total value of every order placed with a business over a defined period of time. It’s an important performance indicator as it helps you define who your biggest spenders are and whose spend is decreasing. But how can you keep your AOV rising?
One key way to increase AOV is to encourage customers to return to your store over your competitors. According to Harvard Business Review, it can cost between five and 25 times more to acquire a new customer than it does to retain one. If you can increase the basket sizes of your existing customers, you will see a huge impact on your revenue and overall AOV.
There are lots of different ways to encourage shoppers to spend a little more when it comes to purchasing. An engaging loyalty program is a great way to nudge your customers to add a little extra to their cart.
This blog will cover how to use your loyalty program to encourage customer loyalty and increase your AOV during the following stages of purchasing:
- During purchasing
Loyalty program members who redeem points are found to spend 2.5 times more than non-members when visiting an ecommerce site.
Of course, when a customer makes a purchase, whether they are members of a loyalty program or not, it’s a success. But, each time a customer checks out as a guest you are missing an opportunity to collect data and build long-term relationships. This could be fatal to your overall growth.
When your customer signs up to your program, it opens up the doors to a range of communications that could encourage them to come back to your store and spend more each time.
To spur purchasers to join your loyalty program, show-off the instant rewards they’ll receive for creating an account. Baseballism offers new members 15% off of their first purchase. This provides instant gratification that will initially delight your customers into creating an account and spending straight away.
Or, use these pop-ups to show customers that they’ll receive a free perk (such as free shipping) or product if they reach a particular point threshold. This way, they’ll be encouraged to increase their AOV to reach it.
While your customers are browsing your store, take this opportunity to give them reasons to spend a little more. Use the decision-making period to try and upsell and cross-sell, before they complete the order.
Loyalty tiers are an effective method of giving customers the boost they need to increase their order size. By making sure each tier includes more rewards and perks than the previous one, your customers will see the benefits and aim to reach the next tier. As a result, they will add more to their basket to move up a level.
Pulse Boutique has a three-tiered loyalty program. Members are automatically entered into “Tier 1” when they create their account. Then, customers are motivated to spend more and return to the store in the hopes to move up to the next tier, which has added rewards and exclusive benefits (such as more VIP offers).
Another strategy to increase your customers’ order values is to include reminders throughout the customer journey showing that if they spend a little more they will get rewards through your loyalty program.
By allowing customers to immediately redeem discounts in the cart while making a purchase, they’ll want to spend more. In fact, customers tend to increase their basket size by 36% if they can earn a reward immediately rather than after purchase.
Health and wellness store, Ancient Nutrition, uses this feature in their checkout to prompt customers who are in the process of buying to add more to their basket.
When a customer has purchased from you once, it’s important to keep engaging with them post-purchase to encourage them to return and add more to their cart.
Use post-purchase emails to let your customers know the products they could be spending outstanding points on and the perks they are missing out on to entice them back to your site.
Beauty Bakerie uses loyalty email marketing to run three email campaigns: monthly reward reminders, reward available reminders, and points-expiry emails. Reaching out to customers with these emails show them that they have points waiting that need to be used. This will spur them to return again to spend more or risk losing the reward for good.
AOV is an important metric and increasing it can have a significant impact on your business. To make sure yours is always on an upward trend, try using your loyalty program to implement strategies that encourage customers to spend more throughout all stages of the customer journey.
LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customized loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.