Winning products can still lose money.
I have seen product businesses struggling even when by outward appearances they are winning.
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.
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.
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.
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.
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.
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.
Net Promoter Score (NPS) is my favorite metric. Customer Acquisition Costs (CAC) and overhead costs are why increasing AOV leads to profit.
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.