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Tanner Larsson  0:07  

Alright, let’s talk about your Average Order Value. All right, so Average Order Value is a critical metric in terms of being able to buy traffic and profitably to run an e-commerce store, right? So, AOV, Average Order Value is the total number of revenue you’ve made from sales divided by the number of sales you made in a specific time period, which gives you your average order value, right? The higher the AOV is, the better off you are, the more profit you’re making typically, and the better you’re able to buy traffic at higher and higher costs. Obviously, if you want to scale a business, you’re going to need to be able to acquire more and more expensive traffic. To do that, you need to have a good AOV, all right. Now, the problem is many ecom stores struggle with AOV, either they’re selling lower-priced products and you know $10-$20 products and their AOV is around $10-$20 bucks, or potentially, they have a high AOV, but their product cost is also super high and their acquisition costs are super high. So, their AOV needs to be even higher, right? So, this is the AOV is a big deal like your AOV should actually be significantly higher than your cost per acquisition, right. But how do you get a good AOV? What can you do? So let’s talk about a couple really cool ways and easy ways that you can boost your AOV. Okay, the very first and the simplest thing you can do to boost your AOV is simply to start testing your price elasticity. Okay, so, price elasticity means the range of prices that you can sell your product for and there are different impacts they have on conversion. So just because you’re selling your product at 9.99 doesn’t necessarily mean that that’s the best price for it or the maximum profit for it when you average everything out. So, an example we used to sell a kitchen slicer its called a mandolin and basically it slices it dices, it chops, it has all these different attachment type things. And we sold that we started selling that at 19.95. And then, we raised it to 24.95. And then, we realized that “Hey, they’re still buying.” So, we kept testing it. And we actually found out that the magic price point for us was $37 and 50 cents, okay? I’m sorry, $34 and 50 cents, excuse me. It’s a big difference from 19 bucks right now, not every product works that way. But we kept raising the price and testing it and realizing that we were still making more money, still making the same sales, and we were able to test price. 

So, simply by raising your prices, you can get a nice boost to your AOV that’s the easiest way to do it. The next thing you can do besides raising your prices is offer a bundle. Okay. Put things together sell three or more items, two or more items. Put three products together, four products together, even if they’re the same product. Let’s say, you were selling supplements. You could put three proteins bags together and give them a bundle deal or six protein bags together. Or maybe you were making some kind of a fitness thing you can give them a pre-workout, some BCAAs and their protein in a bundle like a performance bundle or something like that. You do the same thing with jewelry, bracelet, earrings, necklace, combo, right. Anything you can do to bundle them together. print on demand, guys, you could do a t-shirt, hoodie hat, or a T-shirt hoodie, or a T-shirt takes off hoodie or all kinds of things right. Or potentially you could add in a mug or a pillow or one or the other. There are so many different prints on-demand options these days. But anyway, you could take the same design and put it on multiple items and give them an option. Somebody who wants it on a T-shirt might also want it on a sweatshirt simply by bundling that allows you to raise your price and if you can bundle it. Combine the three together, offer them a discount if they spend more to buy the bundle, and still raise your AOV and your profit per item up significantly. Okay. Bundling is one of the easiest ways to do that. Okay. Another thing you can do that is actually what most people are already doing, or are at least attempting to do, but they’re not necessarily doing it right, is you can use some sort of average order value type boost, which is typically an app that they use on the store somewhere, right? So there’s, you see a lot of the apps that will add like a related product or Amazon-style, customers frequently bought and then the three items that customers frequently bought together. Now, on Amazon, that’s proven to work really, really, really well. Okay. And there’s a bunch of app companies that make apps and plugins for e-commerce stores that have duplicated that. And then, that injects that little script to that widget into the site, and on the product page, somewhere down the page, it will show you know, “Hey, customers usually buy these three items together.” And you can obviously, put whatever you want in there to show up. Another way of doing it is below the Add to Cart button. And then other popular ways which are not necessarily good ways but popular apps that do it is when the Add to Cart button is clicked, a pop up comes up and offers an upsell, okay, which is basically an Add To Cart or bump boost, right? And then, the next – so that’s one way. Another way that they do it is that when once you’re in the cart, below the cart will be or below or above the cart will be like a little offer box that says “Hey, you would you like to add the sunglass cleaner to your sunglass order ?” “Would you like to buy a case for your sunglasses with your sunglasses?” Something like that. Okay, that’s an in cart boost. All right. And then, of course, there’s also post-purchase flows, where after the post-purchase, they click the Checkout button to process their credit card. You could use an app or software to go do upsells and downsells post-purchase. Ideally, this is the best possible way to do it.

Okay, because once you’ve already captured their credit card, you’ve got the sale, the sale is committed so you’ve got the money, then you can try post-purchase to get one-click upsells or downsells in place to get them to expand more in that session, but if they don’t, it’s okay you didn’t cost yourself the sale, you still got the sale. Alright, and that is ideally the best way to do that. On the Shopify platform, there’s OCU, there is a cart hook, there is funnel builder, there’s a couple of different apps out there that allow you to do post-purchase upsells. It’s the best way to do it and also post-purchase. You can also offer a continuity subscription offer and make a really sweet offer to get them onto a rebuilding thing which not only helps your average order value but helps your customer lifetime value. So, that is a really, really great way to do it. It’s the best way to increase your average order value is post-purchase. Okay? However, Post-purchase brings with it its own set of problems. On Shopify, specifically, you have to use a third party Checkout, you can’t use the Shopify checkout. And, there’s a little bit of issue with it. Okay. So, if you don’t use post-purchase, what do you do? Well, people think that because an app has been created, that it’s been tested, and it’s a good app, well, that’s not true. Okay. Most of the big apps, they’re out there for average order value boosts are not like they call them in cart upsells, or things like that are ones that either do a pop up when the Add to Cart button is clicked, or they show up in the shopping cart. Okay? Both of these are actually a very, very bad time from a data standpoint to offer this, okay. Now, does that mean it’s really not going to work? No, it actually will. You will see your average order value, you’ll see that little green arrow on Shopify going up, happens all the time. Okay, so yes, that will happen. But the problem is, is that you’re only checking that statistic. We are a data optimization company. So, we look at all the data underlying data, all the different metrics. And what we find is every time a pop up on the Add to Cart button, or the in-cart upsell are used, yes, AOV does go up a little bit. But other metrics, more important metrics actually go down and they go down so far, and so much that it actually is you lose more money than you gain in the average order value boost, okay, we’re talking about metrics like Proceed to Checkout, reach checkout, initiate checkout. From actually completing the add to cart, all of that kind of stuff. Also, session value, visitor value, and a lot of other metrics, okay? These, all these other metrics are very important as well. So whenever you make a change on a store, you don’t just affect that one thing. It has a secondary effect or a third effect to other areas of the store. Okay? So it’s really important to know that. So, we on any of our stores and any of the ones we consult on, partner with or train, never let our customers use in cart upsells or pop up upsells that click on the Add to Cart button. Once they’re in the cart, all you want them to do is a purchase. That’s it. Okay, once you got the purchase, cool. Now, what else can you do though? Well, on the product page is a great time while they’re still in the browsing mode to offer them some sort of upsell or average order value boost because they’re still browsing they’re still considering they haven’t committed to the purchase yet. So, it’s a good time to offer it. Okay, so how can you do that the best way to do that is either with a checkbox, bump right above the Add to Cart button or a selector option below the Add to Cart button up right where they’re making the purchase decision. Okay. Second to that, the next best thing would be down below the product description using the Amazon-style customers have also bought this now one more question. On this, okay, before we wrap this video up, whatever you offer on the product page as an upsell as an Add To Cart boost, anytime you do that, it needs to be a no brainer offer, okay? The idea is not for them to have to go do more research about the additional product that you’re offering. Okay? The idea is that they can click it, at it, and they’re good and they don’t need to think about it. So, if you’re trying to sell them additional like jewelry, and then you say customers also buy these three other types of jewelry or two other types of jewelry, chances are, they’re going to need to go to that product page of each one of those pieces of jewelry to see if they actually like it. If the measurements are right and if it fits them, okay, or if they like it. That’s not a no brainer that actually broke the buying process because they were already considering the item that they were on. Let’s say they were looking at a ring. They’re already there. They’re ready. So the upsell should be something that actually is like that. No brainer. Don’t have to think about it. 

Okay, the same thing would you use it up by the Add to Cart button needs to be No brainer, simple, easy to do that they don’t have to think about it. Anything that requires cognitive load making them think about it and breaks their concentration of what they were already doing is actually going to hurt you more than it helps you and your average order value and other metrics are not going to rise nearly enough. Okay, but if you do that, and do a no brainer offer to either post-purchase flow or on the product page upsell, then you can really do some nice things to boost your average order value. And you can also combine that with price elasticity testing and bundling to really maximize your average order value. So guys, if you liked this video, watch these two videos over here because they’re going to show you even more ways to optimize your store. And also don’t forget to click the subscribe button below and little bell icon to get notified when I release new videos. See ya.