A small increase in your average order value (or AOV) will have a big impact on your growth. There are steps you can take to optimize the customer journey to encourage customers to increase their basket sizes and, therefore, your store's overall AOV.
When it comes to increasing AOV, an effective tool is a loyalty program. A good one will help power your marketing efforts and ecommerce growth by encouraging retention and repeat purchases. You can also use a loyalty program to incentivize referrals and social engagement, as well as aid better personalization with data and insights.
But here's the best part: The average order of a customer that uses a loyalty reward in a purchase is 39% higher than the one of a customer who doesn't. So, how can you make the most of your loyalty program potential?
Here are four ways to increase AOV using your loyalty program:
Step one to increasing AOV with a loyalty program is to build up your members.
A great time to encourage customers to sign up is post-purchase. They already trust you enough to have already bought something, so they are more open to communication and taking the relationship further. A notification showing the benefits of your loyalty program can be enough to get them to sign up.
You can also A/B test the effectiveness of your post-purchase pop-ups to optimize the best way to encourage referrals. Try mixing up the perks you display‚Äìsuch as your monetary benefits (like free shipping) versus your other benefits (such as early-access to sales).This way, you'll be able to see if your customers respond better to discount-driven perks or experiential ones.
With CartHook, you can customize your post-purchase upsells to match your brand and what your customers just bought.
Email is still a great way to communicate with customers, since 99% of consumers check their email every day. Send an email to customers who use the guest checkout explaining the benefits of your loyalty program with a call-to-action encouraging them to complete their membership.
This may seem obvious, but many brands fail to offer their loyal customers rewards that are worthwhile.
To encourage your customers to spend more and build up their loyalty points for rewards, make sure what you're offering is valuable to them.
Health and wellness brand, Organifi, offers free products in their loyalty program worth $80, which is their most redeemed reward. The products can be redeemed when the customer earns 3,500 points, which, when you can earn 5 points for every $1 spent, is both achievable and aspirational.
The AOV of Organifi's reward redeeming members is 3.75 times more than their non-redeeming members. Non-redeeming customers are not working towards a goal or reward. Whereas, members who redeem rewards are motivated to spend more with the aim of receiving high-value rewards in exchange.
It's human nature to like being rewarded and praised. And, the quicker the better. Play to this desire and work hard to shorten the gap between a customer's purchase and them receiving their first reward. If the customer knows they'll instantly be rewarded for converting more often, they'll be more likely to return and buy more with your brand. This approach can increase order amounts by 36%.
Instant Points by LoyaltyLion allows customers to use the points they're earning from their purchase in the checkout to redeem rewards before they complete the order. This way, customers won't have to wait until after they pay to claim rewards. Instead, they can see and use their points in real-time.
Instead, they will see their points build up automatically with their current purchase, along with the reward they are close to redeeming. This increases AOV by encouraging customers to add more to their basket to cross the threshold to claim a reward instantly.
Cosmetics brand, Pacifica Beauty uses this feature in their checkout. Shoppers can see their points balance, including the ones they will earn from their current basket. They can also see how many more points they still need to earn to claim a reward, such as a full-size tube of body butter. This encourages customers to add more to their order so they can get higher-value perks along with their transaction.
Thanks to this approach, Pacifica Beauty saw a 22% increase in their AOV.
Our last tactic to increase AOV with a loyalty program is simple but effective. 78% of customers said they would want to be individually recognized and rewarded for their loyalty. So, award more loyalty points to customers who spend over your average basket size.
Bonus points can entice customers into spending more. You can add a pop-up notification to your site that will show when a customer is close to spending the average order value. The pop up will explain that the customer will receive a certain number of points if they spend $X more.
Health and wellness brand, Vitabiotics uses this pop up on their store's homepage. They use ¬£40 as their AOV and reward the customers with an extra 250 points when they exceed this amount. This encourages customers to spend more and will over time increase the brand's overall AOV.
AOV is an important metric for your brand since a small increase can have a huge impact on your revenue. Use your loyalty program as a tool for encouraging your customers to spend a little more. Optimize your program from sign-up through to purchase and post-purchase to entice customers to boost their order size. Use these tactics throughout the customer journey to successfully increase AOV with a loyalty program.
LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customized loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.