In the business world, the only thing better than making more money from more sales is making more money from fewer sales.
Enter Average Order Value (AOV).
What is Average Order Value?
Average order value (AOV) refers to the average amount of money your customers spend during a singular exchange.
The formula for AOV, then, is:
(Revenues) / (Number of sales)
Increasing AOV is a pretty common goal for most owners and sales teams — for a number of reasons.
Most obviously, a higher AOV means you’re bringing in more money with every sale you make. It’s also much cheaper to sell more to existing customers than to bring in the same amount of revenue from brand new sales. What’s more, increasing a customer’s (or audience’s) AOV will almost certainly increase their lifetime value — and will do so in a much shorter period of time.
6 Key Ways to Increase Average Order Value
Thankfully, there’s no shortage of effective strategies and tactics for B2B eCommerce companies looking to increase their average order value.
Here, we’ll take a look at how some of Credit Key’s top-performing B2B clients have made it happen for their teams.
1. Offer Buy Now, Pay Later (and Other Financing Options)
Your B2B customers can only spend more money with your company if their financial situation allows for it.
In providing your clients with multiple financing options, you’ll give them more buying power — in turn allowing them to buy more from you whenever they engage with your brand.
(Providing customer-friendly financing options can also increase purchase frequency and overall customer satisfaction, too.)
Here is a glimpse of Credit Key's customer reviews.
Though still relatively nascent, Buy Now Pay Later financing has already shown to be an effective option for today’s B2B buyers. In fact, many of Credit Key’s clients have seen a major increase in AOV after implementing our financing services:
- KoiCBD increased AOV by 600%
- Softshirts saw a 9x increase in AOV
- Voltage Coffee increased AOV by 10x
If financial woes are the only reason your customers aren’t spending more per-transaction with your brand, implementing a BNPL option is the key to increasing AOV for your team.
2. Offer Volume Pricing and Discounts
While volume pricing is standard procedure for wholesale companies, it can be used by B2B companies of any kind to substantially increase average order value.
PostcardMania, for example, provides bulk mail discounts that scale based on the number of postcards ordered.
Here, PostcardMania explains the discount in terms of actual price per-item for orders of different sizes (while also contrasting their low prices with typical USPS prices, to boot).
Another option is to showcase your volume pricing offers as percentage discounts. For example, Lowe’s advertises its bulk offers directly on its B2B product category and product pages.
Note that both the structure and framing of the volume discounts is crucial here. While your volume-based orders must obviously be worthwhile to your customer in the first place, you must also communicate them in a way that makes this value crystal clear.
3. Provide Pricing Thresholds Discounts
You can also offer discounts at certain dollar amounts to incentivize higher-value purchases from your B2B customers.
Here, your focus should be on setting the discount threshold just beyond your current average order value to get your customers to ever-so-slightly increase their spending with your company. B2B companies can get even more personalized and dynamic here, offering threshold discounts to individual customers based on their specific purchase history.
When going this route, it’s important to stay on top of your AOV as it changes (hopefully for the better). In turn, you can increase your discount thresholds to incentivize even higher value purchases — and to avoid giving out discounts where no incentive is needed.
4. Use Up- and Cross-Selling
Upselling and cross-selling your B2B customers can effectively increase their average order value for good.
If you do it right, that is.
When attempting to up- or cross-sell your B2B customers, you need to consider:
- Their purpose for using your products
- Their capacity to use your higher-value or related products
- Their financial situation and future goals
The goal is to provide substantially more value through your up- or cross-sell offers for relatively little additional cost to the customer. If spending a little more now means more productivity and profit in their future, they’ll have every reason to take you up on your offer.
5. Create Product Kits and Other Combinations
Product kits are another great way to increase your average order value — potentially without even lowering your prices via discounts.
Voltage Coffee, for example, offers a number of product combinations, such as this espresso machine/bean grinder package:
While the total price isn’t discounted in this instance, the incentive is more about convenience and consistency. For one, it’s just easier for customers to make the actual online purchase. What’s more, the packaged offer ensures a 1:1 match for bulk orders — in turn ensuring buyers can use the products exactly as they’d planned.
On that note, your approach to creating kits should be similar to creating your up- and cross-selling offers. Again, the goal is to know what your customers are hoping to get from their initial purchase — and giving them whatever they need to get there more effectively.
6. Provide Uniquely-Valuable Services
On top of promoting related products, you can also increase your average order value by providing additional services to your B2B customers based on their specific needs.
For example, PostcardMania offers a number of services related to both traditional and digital marketing and mailing.
You can also add value to individual purchases through point-of-sale offers such as:
- Hands-on customer and tech support
- Product protection plans and guarantees
- Personalized delivery options
Providing these offers will not only allow you to get more value out of those who are sure to convert, anyway — but will also go a long way toward getting your hesitant prospects onboard, as well.
What are the top ways to increase Average Order Value in B2B eCommerce?
- Offer Buy Now, Pay Later (and Other Financing Options)
- Offer Volume Pricing and Discounts
- Provide Pricing Thresholds Discounts
- Use Up- and Cross-Selling
- Create Product Kits and Other Combinations
- Provide Uniquely-Valuable Services