February 21, 2024
Success shouldn’t be solely measured by the number of transactions but measured by the value derived from each one - Rule #2 Increasing Average Order Value (AOV). This rule recognizes that the path to sustained success involves not only attracting customers but also maximizing the potential of each transaction.
The Significance of Average Order Value
Beyond Transactional Metrics: While tracking the number of transactions is crucial, the Average Order Value provides a more nuanced understanding of customer behavior. A high AOV indicates that customers are not only making purchases but are also investing more (dollars, but also likely time and share of mind) in each engagement.
Maximizing Revenue Potential: Increasing the AOV is a direct avenue to maximizing revenue potential. Rather than focusing solely on acquiring new customers, businesses can capitalize on their existing customer base by encouraging larger and broader purchases across product lines. This approach unlocks revenue streams within the current customer pool, contributing more valuable engagements.
Strategies for Increasing Average Order Value
Personalization: By tailoring each individual's journey, brands can offer relevant products and events in alignment with past purchasing habits. By understanding customer preferences, businesses can not only recommend complementary items but also craft unique experiences, extend exclusive invitations to product showcases, and offer discounts tailored to customer interests. This approach enhances the probability of customers expanding their purchasing interests, fostering greater engagement and satisfaction.
Focus on customer convenience: Offering convenient services such as bookable in-person stylings or virtual shopping assistance enhances the overall experience and gives your customers access to a professional. Offering customers professional, one-to-one guidance where and when they need it increases the probability of a purchase, as well as encourages customers to purchase more and remain loyal. With personalized one-to-one experiences, retailers can increase AOV by facilitating educated purchases and encouraging customers to explore additional products that they may have not considered browsing on their own. More so, the ability to schedule in advance reduces walk-in wait times, drives velocity, and allows for a more prepared staff member.
Post-purchase engagement: Engage with customers throughout their entire journey, not just at the point of purchase. This practice encourages repeat business and increases the chance of larger, more frequent orders. Creating an experience where your customers feel special and unique drives brand loyalty, making your business their first stop when looking to make a purchase. Post-purchase engagement doesn’t start and end with promotional emails. It extends to creating an experience that includes invitations to trunk shows and product launches, and other VIP events that drive brand differentiation, relevance, and loyalty.
Exclusivity: Provide exclusive incentives, rewards, or perks for high-value customers who consistently spend above a certain threshold. This could include VIP discounts and events, early access to new products, or personalized shopping experiences. Recognizing and rewarding loyal customers can foster brand loyalty and encourage repeat purchases at higher order values.
The Ripple Effect: Business Growth and Enhanced Customer Satisfaction
Sustainable Revenue Growth: Increasing the AOV is not just about immediate gains; it sets the stage for sustainable revenue growth as measured by long term customer lifetime value. As customers consistently make higher-value purchases, the cumulative impact on the bottom line becomes evident. This strategic approach to revenue generation contributes to the long-term financial health of the business.
Enhanced Customer Satisfaction: When customers perceive added value in their purchases, whether through bundled deals, personalized recommendations, VIP treatment or exclusive discounts, their overall satisfaction with the shopping experience grows. Satisfied customers are more likely to become repeat buyers and brand advocates.
Rule #2 underscores the strategic significance of increasing average order value. By implementing thoughtful and customer-centric strategies, businesses can maximize the revenue potential of each transaction and set the stage for sustained success. Elevating the AOV not only contributes to immediate financial gains but also fosters a positive customer experience, creating a win-win scenario that positions the business for long-term growth and prosperity.
The JRNI Intelligent Customer Engagement Platform with AI-Powered solutions for event management, self-booking appointments, and queuing uses a data driven approach to providing customers with high quality engagements across the entire customer journey. JRNI utilizes behavioral and demographic customer data to not only increase the frequency of purchases but also to give brands the tools they need to treat each customer as if they were their one and only customer. This type of approach to customer engagement creates loyal customers who are willing to invest more, over time, into your brand.
Missed Part #1? Read our strategies for creating a customer for life here!
About the author
