You have an online business selling products or services to a decent number of customers on the internet and making a good amount of sales. But, somehow, you are not reaching the desired profit margins!

Most likely, the reason behind this is that even if customers come to your e-commerce store and purchase the products, the costs you incur per order are more.

The only way to become a more profitable business than you are is by increasing your average order value (AOV). Tracking this metric or key performance indicator can be a lifesaver for your business. It can help you to beat the competition as your profit margins will improve by reducing the cost per order or customer.

So, going further, you will see different tactics that can help you increase AOV. But, before that, let’s study what exactly AOV is and how to compute this value.

Defining Average Order Value

You can define AOV as the figure showing the monetary amount you are generating per order you receive in your online business. The higher this value is, the better your profit margins and revenue conversion value.

Another way to look at it is that you are providing better value to your customers from your products or services. That is the reason why you have a higher average order value which is excellent for any organization.

Another value addition of tracking the AOV metric helps you understand what your customers think about your online store and its offerings. This study can aid you in making better business choices and developing or improving your offerings.

Computing the Average Order Value

Now, let’s have a look at how you can calculate the AOV.

Firstly, the formula for computing the AOV is:

AOV = Total Sales Revenue Amount / Number of Total Orders

You can choose the period for which you want to calculate the AOV, like last month or three months. The values of total sales revenue and the number of total orders have to be for the same period to arrive at the average order value for that time.

To understand the computation of AOV better, let’s take up an example as follows:

You want to know your AOV for the last month, so you need to know how much total sales revenue you had and the total number of orders for that month.

Total Sales Revenue Amount = INR 5,00,000

Number of Total Orders = 5000


AOV = INR 5,00,000 / 5000

AOV = INR 500

Thus, the average order value for last month was INR 500, which means that per order, your revenue was INR 500.

Tactics to Increase Your AOV for Better Results

To increase your AOV, you can use the following strategies and get better results:

1) Promote Higher Savings through Discounts:

Everyone likes gifts and freebies, and your customers are no exception. When companies take the opportunity to use this knowledge, their growth is guaranteed.

Complimentary products, buy one get one free, and discounts on limited products are great ways to grab eyeballs and generate revenue. Deals are most attractive when they have a limited-time offer and availability. In addition, when items get packaged together with a great deal on offer, it creates buzz and excitement in customers’ shopping experiences.

Studies have proven that if discounts or extra products get offered at the end of the shopping checkout, chances are that you will not just generate revenue but also have customer loyalty increasing your AOV.

2) Club Complementary Products Together:

When your customer visits your online store to purchase something, try and offer complimentary products on the page that compliments that particular product. This way, you can increase the average order value of the sale.

You can do this by offering discounts to them when they buy all the recommended items together with what they came to purchase. It is an excellent way to add value to the customers and boost the overall revenue of your business.

While clubbing different products or services for your visitors, you can even move many slow-moving products, which helps your business to become cost-effective. For example, if your client is buying formal pants from your site, then you can offer a slow-moving product like a belt at a reduced price for that particular transaction only.

3) Offer a Customer Loyalty Membership Plan:

The success of a brand depends greatly on customer loyalty. And for this to happen, you have to engage your customer not just with the products but also with various incentives.

Customers love it when you make them feel special and give them much importance. And customers who are happy and satisfied tend to lean towards spending more, helping your average order value grow.

The best way to get customer loyalty is to introduce customer loyalty programs. Points are given for every purchase, freebies for customers who reach a certain spending threshold, and free membership cards are some of the ways you can guarantee customer loyalty. It’s a great way to increase your AOV, and you are sure your customers are not going anywhere.

4) Incentivize Customers with Cashbacks:

If you are looking to have repeat customers regularly for your business, then this technique of offering cashback is a great way to get results. Incentivizing your customers in this manner creates a sense of value addition among them. It encourages them to buy more with the extra money they earn, positively affecting the average order value metric.

There are many ways of offering cashback, like coupons, vouchers, or currency, that your customers can use only in your online store. You can even make this offer time bound, where there can be an expiry date of the cashback amount, and the customer must utilize it within a specific date.

5) Up Sell & Cross Sell Related Goods:

Up-selling a product means that you are offering to sell an alternate product that could be of superior quality. It could also be an item that belongs to the same category, but the price is high, which helps increase the purchase’s average order value.

In cross-selling, you offer a product that relates to the one the customer chooses in terms of adding value to them. This strategy can assist you in increasing the revenue generation for your company in a single sale.

Both these techniques are excellent for improving the AOV of your business and building a beneficial relationship with your customers.

6) Include a Trial Period Scheme:

Including a trial-period scheme in your offerings can boost both conversion rates and AOV for your online store. Moreover, when you offer your products or services to customers where they can try them for a few days and, if they are not satisfied, can return, it reflects your confidence in your offerings.

It builds trust in customers, who are willing to try your products as they can get their money back if it doesn’t work for them. In addition, the trial-period scheme encourages customers to purchase more items from you which in turn increases your average order value.

7) Provide Free Shipping Facility:

In order to get bulk sales, it’s always great to provide incentives like free shipping to the customer. This method is a sure-shot strategy for all online businesses to increase their AOV.  

While promoting this offer to the customer, it is best to display it on the homepage and product pages, and you could also put it up as flash signs on the website. Surveys have proven that 84% of customers shop because shipping is free, and 30% of people are more likely to increase the size of their order if they get the free shipping coupon or incentive.

This specific tactic will also help you with conversion and cart abandonment rates. Just keep in mind that you have taken into account your profit margin, shipping cost, and product prices before making this offer.

8) Ensure an Easy Return Policy: 

This tactic of increasing average order value is vital to win over new customers and ensuring more sales for your business. In addition, providing an easy return policy builds confidence among people that you are a reliable brand in the market, and they can purchase an article from your store without any worries.

An exchange policy that works efficiently makes the customer comfortable to try new products and services as they can always return it if they are not satisfied, which in turn has a direct impact on AOV.

Also, ensure that you display this policy clearly for the customer to understand and be sure of your commitment to the procedure.


As you can see, there are several tactics you can use to increase your average order value for your online store. Take your time and try out each of these tactics one or a couple at a time to see which one works best for your business. Only with patience and perseverance is it possible to see results from these strategies.

So, work on increasing your AOV to grow your business and beat your competition!