Being a sustainable online business is a daunting task. As a prerequisite to running a flourishing online business, one needs to ensure constant sales and revenue.
To be sustainable, you not only need regular sales but also need to generate high-value orders. This means that a customer buying one high-value product should become your primary target audience for increasing your Average Order Value (AOV).
This blog will help you understand the nuances of increasing your AOV, thereby also increasing your revenue and sales.
Important metrics to measure the health of your online business:
- Average Order Value (AOV) = Total revenue/ Total number of orders.
This metric will help you understand how much your customer spends, per transaction.
- Average Basket Value (ABV): This is similar to AOV. But, when AOV shows the amount a customer spends per transaction, the ABV helps you gain insight into the number of items a customer bought, per transaction.
- Customer Lifetime Value (CLV): CLV is yet another important metric to measure your business. This helps you understand the worth of a customer, as long as he is associated with you.
4 Ways to Increase Sales and Revenue for your Online Business:
When customers visit your website, they are most likely to have a rough idea about what they wish to purchase from you. An effective strategy to increase your AOV is by listing similar product recommendations. These recommendations, may either be higher value products or products with better features and offerings.
This encourages customers to continue browsing through your website, assuring you better sales and sometimes even a few impulsive buys by your customer. Additionally, it also assures an increase in your overall revenue generation.
Upsell and cross-sell your products:
To start with, here are the basic definitions of upselling and cross-selling:
- Upselling: This is when you promote a product upgrade or a more expensive version of the same product to your customers. This can be done with good product descriptions and marketing around the upgrades you’re selling in order to convince your customer to make that spend.
- Cross-selling: This is one the most commonly used modes of increasing your AOV. When your customer is buying a particular product, you can also display the complementary products that go with the product they wish to purchase.
For example: If your customer is buying fabric paint from you, it is also likely they will be interested in complementary products. These products can be paint brushes, varnish or even canvasses. Showcasing similar products will help them further explore your website instead of just checking out. This will not only increase the AOV but also the overall sales when coupled with upselling strategies.
Set defined minimum order values to avail benefits:
For a customer to make larger spends, it is important for them to see an incentive to justify the spend. Some of the possible tactics can be:
- Add an option of free delivery for a said amount.
- additional discounts.
This will act as a precursor to encourage them to make larger spends with you. Additionally, this will add to your overall revenue and sales, despite the smaller chunks of money you may lose in terms of the discounts or other offerings.
Customer loyalty program:
If you are an online business who deals with consumables, then this would be an ideal strategy you can employ to get recurring customers. These businesses are ones that primarily deal with selling products which need to be frequently repurchased.
For example: If you are an online business that deals with cosmetics, groceries or even household products, you can add a subscription button to help customers define how often they would like these repeat orders. This can also be accompanied by a discount offer. The percentage of discount will depend on how many months they choose to repurchase the particular item.
This is an ideal strategy for increasing your revenue as well as retaining your customers. It also helps in striking a good bond with your customers and forging better and long-lasting associations with them.
Do MORE with Instamojo:
While these strategies can help you in customer acquisition and retention, an added benefit is to build a strong brand loyalty via social media marketing. This will not only keep your customers engaged but also help you to create social media as a platform, where you can update customers on new launches, discounts, offers and more.
Keeping your customer happiness as a priority is key.
Providing seamless and secure transactions covers the end-to-end process of a customer’s association with you. A happy customer is most likely to repurchase with you. Additionally, it more likely they will also spread the word about your brand and offerings.
With Instamojo, you can do more than just collecting payments. You can, not only assure your customers with safe transactions but also use a host of other offerings to help your online business grow. Some of our free services are a free online store, invoice generator, SMS alerts, pro analytics, and more.