Ecommerce: Get Your Customers to Spend More

By Eric Leuenberger

Customer SpendingGenerating more revenue is undoubtedly one of the most important long-term goals of any ecommerce store. Building revenue and thus profits relies on not only getting the primary sale, but also ensuring the average order value of each sale is at a maximum. Careful planning and proper implementation combine to help see that goal is met.

Although many business owners have an idea of what their revenue goals are, many do not actually put that idea in to actual and measurable numbers. This is one key to reaching them in the first place.

How can a plan be devised in an effort to reach a goal if that goal has not first been measured nor tested to see if it is reasonable? The answer is it cannot. In the words of an old management adage, “you cannot manage what you do not measure.”

In an effort to get customers to spend more, keep in mind that unless there is a plan, unless there is a reachable and realistic end goal, and unless all those figures are measurable, achieving it might be difficult if not impossible.

The four strategies presented here provide viable methods for increasing average order values. Here are 4 ways to get customers to spend more:

1) Increase Product Price

Customer SpendingThe most obvious way to get customers to spend more is by increasing the price of products. However, one must clearly understand what the market is willing to pay and be conscience of what competitors price their products at.

Offer a similar or identical product at a premium price can be done effectively as long as the business differentiates itself from the competition, giving customers a clear reason for the ‘premium price.’ With this strategy, one must make the customer see that the perceived value of the product—when purchased from the store—is better than that which they would receive when buying from a competitor.

This can be accomplished a number of ways including showcasing outstanding customer service (no hassle returns, free shipping, rewards programs, etc…) and then backing it up with actions.

2) Cross Selling of Similar Products

Cross selling products just because a store can is a bad idea. It happens more frequently than it should; storeowners cross sell unrelated products in an effort to increase sales. They are convinced that if the customer does not like the first product they were viewing they will click on another product that might interest them. This works when the products are related but often has the opposite effect when the products have little in common.

The question to ask when cross selling is, would a customer click on a pack of batteries that were being cross sold if the original product they were viewing was a shirt and pants? Since the two categories are completely unrelated, doubtfully not.

The primary goal of a cross sell should be to increase the customer’s average order value by offering them a related item which they can add to their cart in addition to the item they are currently looking at. Cross selling batteries, as an example, when they are looking at a radio is a better alternative. Cross selling socks, shoes or a tie that complement a shirt and pants they are viewing is also the better alternative.

3) Free Shipping Offers with Constraints

It is no hidden secret that free shipping works. In fact the majority of Internet shoppers expect free shipping in some form. Take advantage of this consumer psychology and increase average order value by offering free shipping for orders that reach a certain threshold. If the goal is to get customers to spend at least $45 then consider offering free shipping for all orders $45 and over.

4) Create product bundles.

A great way to increase average order value is to develop combinations of products that when bought separately would cost more. Let us take Apple iPods as an example. Imagine a store that sells an iPod Nano for $149.95 and a car adapter priced at $54.95 (as separate cross sell). These items are likely to be purchased together yet when purchased as individual items a customer would have to pay a total of $204.90. By creating a bundled product, which includes both items for just $175, a store increases the average order value from what could have been just $149.95 to a better $175. Think of it as cross selling at a discount. When carefully planned and priced accordingly, customers will see it as an offer that cannot be passed up.

These are just a few examples of the ways stores can increase average order values, getting customers to spend more and boosting revenues generated. With proper planning and implementation, stores can achieve increased average order values targeting current traffic levels and thus be well on their way toward reaching the ultimate revenue goals.