Have You Maximized Your Company’s AOV? | Behalf
Maximize Your Company’s AOV
Is average order value (AOV) one of your company’s primary KPIs? Measuring the average price of a sale and tracking how it fluctuates over time will tell you a lot about customer satisfaction. Does AOV increase with customer tenure, signaling deeper engagement and a more entrenched relationship? Does your AOV benchmark negatively against your competitors, highlighting a gap in your product set?
There are many factors that impact your company’s AOV: marketing initiatives, pricing strategies, sales techniques, etc. You must first understand where you stand so you can explore opportunities for improvement. Many focus first on Sales as the team to take ownership for boosting AOV, but a cohesive, cross-functional approach is typically what’s required to deliver high-performance results. For example, your sales team can focus all of its efforts on upselling customers with discounts and special offers; but, without marketing to communicate those promotions more broadly to the entire customer base, you can’t scale growth. It’s time to take a closer look at your 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 you establish 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. Provide customers with real-time chat or a direct line to customer support – not 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 check out without it, lowering AOV.
A strong Customer Support team can make up for a not-so-seamless customer experience. They can also augment your sales team by becoming effective closers. If you start to look at Customer Support as a channel you can use to boost AOV – rather than as a cost center – you can uncover untapped growth. 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 between you and your customers, strengthening 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. Internal departments like marketing and accounts receivable also play a huge role in your customer experience. Without marketing, customers will quickly forget about you and can easily be drawn by a competitor’s promotion. 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 evaluate the creation of a loyalty program or some other promotion scheme 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, you are losing half the battle. 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. Similarly, promotions used to drive urgency can be net positive when you factor in the cost of your sales team. 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 can make larger purchases.
AOV is a telling metric that should be a core company KPI. Once you have benchmarked your company’s average, you can analyze variations across your value chain to identify opportunities to improve. Look at new customers vs. repeats, differences among salespeople, variations driven by individual marketing promotions, and more.