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Four Tips for Increasing Your Average Order Value

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A great meal at a restaurant is a well-orchestrated experience. You start with a cocktail, share appetizers, move on to the main dish and a bottle of wine, and then indulge in dessert and coffee. A good restaurant knows how to build the evening into a multi-course experience, which in turn drives up the average check.

Marketing to a consumer is like a great meal, too. If all you offer is a decent entrée, you miss the bigger win in pairing wines, appetizers, and desserts that make your business a success.

Aim for a little more

In marketing, the cadence looks more like this: a consumer considers a purchase. A search for a black sweater will take a consumer to your site where he or she browses the sweaters in stock. The customer might add a few styles to his or her cart and then leave your site to read some fashion blogs to decide which item is in style for the season and see some ads for your products. In this time, the customer may see display retargeting ads within a social app or a follow-up email promoting sweaters. Then a direct mail postcard comes in the mail, and it features a reminder about the sweater, an upsell on fall scarves, and free shipping. The end result should add up to more than the one black sweater the customer started shopping for.

Yet many marketers, especially newer e-commerce companies, are so heavily focused on acquisition that most have missed the boat on increasing average order value (AOV) or retargeting existing customers. These players often overlook the multichannel strategy or the AOV metric altogether. That omission is a major flaw for marketers, who should always be seeking a better return on their investments.


Don't overlook AOV

Overlooking AOV is like having customers coming for dinner and leaving before dessert. Customers have had a great dinner, and marketers have the perfect opportunity to add on something sweet and increase the cost of the meal. From the desktop and smartphone to the physical mailbox and tablet, a cross-channel approach to retargeting and increasing average order value adds up to a healthier meal for your marketing efforts.

Moreover, encouraging current customers to spend more money per visit on your site is more cost effective than acquiring new customers. It helps you increase revenue at the same cost. Consumers worldwide spent $128.44 on the average e-commerce order placed on a computer in Q1 2015, according to Statistica.com.

But it takes a cross-channel approach to increase AOV. Targeting in-market consumers with relevant messaging is the best way to connect the message. From running a social push or mobile ad to sending out a direct mail card, these approaches will increase AOV at every turn.

The goal is to drive repeat visits and garner a higher average basket. Here are four things that can help you increase AOV.

1. Plan for the return visit

Create a 30-day plan with an emphasis on the return visit rather than on the first week. By tracking the customer journey, you have the option to interact with people over the course of a month in multiple venues. The messaging should align with the stage of shopping that customers are in. Recognize how much they spend and identify the opportunity to drive better, higher conversions.

2. Think beyond digital

Digital is great for banner-based retargeting, assuming the consumer doesn't get overwhelmed by it. It works better when supported by offline channels like mail, which on average drive higher AOVs. Looking at your marketing mix holistically will improve your program's health and drive up AOV.

3. Use mobile to drive initial interest

Mobile is in vogue, which means marketers give the channel more attention than it deserves. Though mobile serves its place in the marketing mix, it's not as effective at driving transactions as it is given credit for. In fact, AOVs on mobile were only $94.52 in Q1, much less than other channels, according to Statistica.com. The small screen tends to drive more tactical purchases, keeping the AOV down.

Marketers need to avoid getting carried away by mobile when the goal is AOV. They must realize that mobile is just one weapon in a multichannel arsenal.

4. Build the menu based on your product and marketing strategy

Marketers need to create a strategy based on their sector to increase AOV. For example, a retailer that sells lower-end products should try to increase the AOV by encouraging users to add on items or subscribe to products. A company that sells high-end products, on the other hand, like a car or telecom company, should try to engage customers who are showing interest so they are top of mind when customers are ready to buy.

* * *

AOV is a great measure of the health of your brand and your product assortment. But to get that proper balanced diet, marketers must take a multichannel effort.


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Lewis Gersh is CEO of PebblePost, the inventor of programmatic direct mail.

LinkedIn: Lewis Gersh 

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