Increasing Average Order Value (AOV) | Behalf

By May 23, 2017Merchants
Increasing average order value (aov)

Increasing Average Order Value (AOV)

If you’re in sales, you’re used to working under pressure. In fact, you thrive on it. On a day-to-day basis your company depends on your team to acquire new customers, grow repeat business, and deliver on several critical company KPIs. However, if Average Order Value or “AOV” is one of the KPIs you’re responsible for, your company may need to think more broadly.

AOV, along with # of new customers and new billed business, is among the most common KPIs for measuring sales team performance. Upselling customers into a higher quantity or into a more premium product directly impacts AOV; hence, the KPI is often assigned to the sales team. Yet, a strong AOV has also been linked to overall customer satisfaction. This means the entire customer life cycle plays a role in AOV, so it ultimately falls on every employee’s shoulders.

Since AOV is likely linked to your goals, it makes sense for sales to lead the charge in bringing a greater focus on customer satisfaction. You play a critical role nurturing customers from a lead to a closed sale. The feedback you receive in your daily interactions with customers gives you an invaluable perspective. Use your sales experience to guide the company into developing a cohesive, cross-functional approach to improve the customer lifecycle. As you already know, treating your customers right leads to more sales.

Sales techniques, marketing initiatives, and pricing strategies are only a few of the ways your company can improve AOV. Your team must first understand where the company stands so you can explore those opportunities. Sales can focus all of its efforts on upselling customers with discounts and special offers, but if marketing fails to communicate those promotions to the entire customer base, you can’t scale growth. So how do you get people outside of your sales department passionate about making bigger sales? It’s time to force everyone to take a closer look at your company’s end-to-end customer experience and optimize it to grow AOV. This article covers several common, yet often overlooked customer experience pain points that can drastically reduce a company’s AOV.

Underinvestment in Customer Support

It’s important that your company establishes an emotional, human connection as early as possible in the customer journey. Customers want to feel like they’re buying from a company powered by people – not answering machines. When customers have trouble completing a step in their purchase journey, someone needs to be there to help. If your customer support team doesn’t already, get them to offer customers a direct line or real-time chat – not just a contact form. If your service team is elusive, your customers are more likely to abandon their shopping carts and buy elsewhere. If they are experiencing trouble adding an extra item to their cart, there is no question they will checkout without it, lowering AOV.

Sales should be focused on converting customers. Your team wastes valuable time trouble shooting and walking customers through difficult steps. An effective customer support strategy can free up your capacity to focus on making more sales and compensate for a not-so-seamless customer experience. They can also support your sales team by becoming effective closers. If the company starts to look at Customer Support as a channel you can use to boost AOV – rather than as a cost center – it can uncover untapped growth and take some of the pressure off of your team. By adding a personal touch and being available to talk customers through difficult purchase decisions, Customer Service can have a huge impact on AOV. These positive personal experiences build emotional connections, strengthening customer loyalty and setting the stage for continued AOV growth among repeat business.

Lack of Ongoing Engagement

Though Sales and Customer Service are the primary customer-facing touch points, they aren’t the only departments in your company that affect AOV. Take a look at internal departments like marketing and accounts receivable; they also play a huge role in customer experience. Without marketing, the customers you acquire will quickly forget about your company and get drawn into competitor’s promotions. Consistent outreach increases brand awareness and keeps your offering top of mind. At a minimum, you want to be thought of first when your customers are ready to make a purchase. Effective marketing can also instigate demand, proactively reminding customers when it is time to re-order or suggesting seasonally relevant goods and services. Great marketing can also build a sense of community with creative campaigns and thoughtful content, keeping your customers connected to your company’s core values. If your AOV trends down as a customer’s tenure increases, you should propose the creation of a loyalty program or some other promotion scheme to the decision-makers at your company to keep repeat customers engaged. For example, a promotion to set-up recurring, bulk orders is a tried and true tactic to permanently increase AOV.

No Incentives to Close

Some customers are quick decision-makers and others need to be nurtured and nudged to convert to making a purchase. If you don’t have incentives at the ready to drive urgency and push those laggards off the fence, your team may feel like it’s heading into a battle with no armor. Many companies shy away from promotions for the obvious negative impact they have on margins. However, promotions structured to drive up-sell are net positive to all parties. For example, give a customer 20% off their 2nd widget if they buy 2 today. If you have a long sales cycle, adding an incentive to close by a certain date can speed things up and release your team to chase the next big deal.

Flexible payment terms and/or credit can function like a rewards program, providing both an incentive to close and encouraging repeat business. An offer of “no money down” or “six months to pay” removes many objections on the spot and typically leads to a larger purchase. If you implement company accounts, giving customers a credit line they can access on an ongoing basis, you will secure higher AOV for all future orders. When you give your customers access to more buying power, they reward you with larger purchases.

Closing with Behalf is one way you can start increasing AOV today. As your team shows results, you can challenge the rest of the company to keep up. Really want to blow the roof off AOV? Enlist the help of your analytics department to identify further opportunities to improve across your company’s value chain.

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