End Hype: Product Entrepreneurship For Impact

Increase the Average Order Value of Your Business

June 07, 2021 Callye Keen Season 1 Episode 71
End Hype: Product Entrepreneurship For Impact
Increase the Average Order Value of Your Business
Show Notes

Winning products can still lose money.

Story

I have seen product businesses struggling even when by outward appearances they are winning.

  • Great product. 
  • Great marketing strategies.
  • Great conversion rate on the landing page.

They were held hostage to the costs of social ads. With ad costs rising, low cost, low margin products are looking even less desirable. 

I know. I have been ranting about premium products forever. 

From e-commerce to retail, a single metric can show me massive insights leading to revenue growth. 

Summary

If you do not have an e-commerce store, listen.

If you do not even sell products, listen.

These strategies help any business where customer places an order. 

  • Product Portfolio
  • Free Shipping
  • Bundling
  • Referrals
  • Premium Products

Why Care About AOV?

AOV is one of the most important metrics for health and growth.

We hear the latest marketing strategy or Shopify plugin. Average order value AOV gives us a metric to see if these strategies are working. 

You try a new marketing effort. Did the total number of orders increase? Great. 

AOV gives us a check against pure order volume growth.

Stop Offering a Single Product

If you sell one product, you are at risk to competition, copycats, and fickle market trends. Use Traction products to cross-sell, upsell, and down sell. Add complementary products making it easy for customers to spend.

Stop Losing Money on Free Shipping

Consumers are addicted to free shipping. You must offer free shipping to compete. Requiring a free shipping threshold encourages customers to hit a minimum purchase.

Stealing from McDonalds (Bundling)

You probably don't offer burgers and fries but we can steal a little tactic from Americas favorite burger joint. The value meal makes selecting the hottest products combined with the highest margin products simple.

Customers get discounts and hit the free shipping mark. You increase margin.

Lower CAC with Referrals

Net Promoter Score (NPS) is my favorite metric. Customer Acquisition Costs (CAC) and overhead costs are why increasing AOV leads to profit.

  • What if CAC was zero?
  • What if new customer purchases came from referrals?

Sell Premium Products

Selling premium products is more than a pricing strategy.

Selling at a premium means mastering perceived value.

Social proof, emotion, messaging, brand improve your average order. Great brands have the foundation to use all the other strategies.