On this week’s episode of 5 Minute Marketing, we are talking about the most important topic for your business right now. We’re talking Average Order Value, or AOV.
Think about the last time you ordered something from Amazon. What was the check out experience like? Did you end up buying only what you went on to buy? If you’re anything like me, you probably at least checked out the “suggested items” list that oh-so-conveniently pops up right before you finish your purchase. That list is no accident; it’s placed there strategically because Amazon already knows what I’m about to tell you: your AOV is critical to your business’ bottom line.
We have all seen the ways companies try to increase their AOV. Grocery stores have candy in the checkout line, Apple makes sure you know you can upgrade every piece of the Ipad you’re buying, and online businesses always try to get you to bundle the item in your cart. All of those tactics are aimed at one goal: increase that AOV and get the most bang for your buck from every customer.
We are going to talk about a few ways to increase your AOV, like order bumps and upselling. I want to make sure you are getting the maximum value out of every customer that buys something from you, and I want to make sure you’re maximizing their value now and not just in the future.
As always, I’ve created a cheat sheet to help you navigate this topic. You can calculate your current AOV and then come up with some ideas to increase your numbers. You can click here to download that or click on the image below.
Make sure to tune into this week’s episode. You’re going to want to take notes, and take action as soon as it ends. Your bottom line depends on it.
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… go to Amazon, and try to buy something without Amazon offering you something else to add to your cart. It’s physically impossible. Why is it physically impossible, because they understand the value of increasing average order value, period. So, I made a video a couple weeks ago, um, put it into um, one of our courses, our main course, uh, called, the One Hedge Funnel Master Class, and the video was all about uh, this concept of average order value or average cart value. Um, ACV, or AOV.
Well, here more advanced marketers talk about those, those acronyms. They mean the same thing. Um, and I made a video explaining what it was, uh, how to calculate it, uh, why it’s important, and the, the comments kind of surprised me. People were so happy to finally know what this means. It made me realize that I think a lot of times, especially for me. I take for granted what people might know and what they might not know. And, there’s a lesson in and of itself in just that statement, that you most likely …
One of the things you always have to remember, if you’re gonna sell to people, is that you’re, you’re ahead of them, like, a, imagine if Apple let their product developers, their engineers sell the iPhone, they’d be talking about, the, the weight and the thickness of all the metals and all, how all the electronics work and none of us give a damn about any of that stuff. That’s why you have to let marketers sell your product, or somebody who understands how to sell. And if you’re just starting out and it’s just you, or it’s just you and a, an administrative assistant or a VA, you have to become the one who understands how to sell your product, and to do that you have to understand how to speak in the language that your customers speak.
Um, you see this in politics, the people that win elections know how to speak the language that their constituency speaks. They don’t speak above them. They speak at a first grade reading level, not a 12th grade reading level. Um, you gotta stay at their level. So anyway, back to what today’s episode is all about is, average order value and average cart value. Um, again, they mean the same exact thing. AOV means the same thing as ACV, and essentially the way that you come up with this number, what is your average order value? You take how much money you’ve made, the total amount of money. If you’ve made 100 bucks, you divide that by the number of orders, the number of customers that went through that process to give you 100 bucks, so if you’ve 100 bucks, and you’ve got 10 orders, your average order value is 10 bucks.
And here’s the thing that, the, most of us seem like, okay, the average order value is just gonna be the price of my product, right? Well, yes. It is, if the only thing you’re trying to sell someone when they buy is one product. So, imagine if at the grocery store, the, the gallon of milk was 10 bucks and 10 people walked in and 10 people walked out with … And, and you could only buy one gallon of milk. Well, every customer that walks into a grocery store and walks out with something would be worth 10 dollars, but obviously grocery stores make their money, because you walk in and you take two gallons of milk, um, and you buy 100 other items.
So, the grocery store be a perfect place to go find, what is your average order value? What does the average person go into the grocery store and walk out with? That’s one of the biggest numbers in this internet marketing game, if you’re gonna try to make sales online and really it, no matter what it is, it, this applies to offline businesses. We, we do this with um, the local ballet studio that I help, um, you can do it with basically any type of business. You need to be focused on trying to maximize what every customer is worth. That, not, well, I’m not talking about customer lifetime value.
I’m not saying, you know, those are two different things and they’re both extremely important. Average order value is on day one. This is, uh, customer lifetime value is, okay, you get a customer today to come buy your widget. In one year, what are they worth to you? And they’re worth more hopefully in a year, because that widget eq, either they need to come back and buy new versions of it, or maybe that widget is a recurring subscription, and you’re making money every month, or maybe you have a second, third, fourth, fifth, sixth widget that you’re gonna sell them in month two and three and four and five.
And over time, after a year, your customer lifetime value goes up and up and up. That is a topic for another day. That is equally, as important as what I’m talking about today. Today is how do you make your customer worth more today? When, when they come to your site and they wanna buy something, that you don’t let them just walk away with that one thing, that you try to upsell, cross sell, down sell other products and get them to be worth more today. And, this is mostly important for people that are spending money to buy traffic.
If you’re putting in ad out on the internet, or an ad on YouTube, an ad on Facebook, an ad on the radio, an ad on TV, you, you’re fronting that money, so I’m giving Facebook today, we’ll give Facebook 15,000 dollars today, uh, in, in ads. And guess what? If my average order value is zero dollars, because all I’m doing is selling SamCart trials, I lose 15,000 today. Now I know I will make that money back in 14 days, when all those trials convert into paying customers, and then I’ll make even more money in 45 days, after they get re-billed again.
But, I don’t wanna have to front 15,000 dollars today, ’cause, it just doesn’t sound like a good idea, and I don’t have to. Like, we could, we have the money to do that, but why would I want to do that, when I could get them to actually leave the cart, check out, go through the order process and actually pay me enough money on average, that I make that 15 dollars back and more and that is the process of increasing your average order value, so what do we do?
We, when we sell SamCart trials, I have what’s, one thing is called an order bump, so there’s something on the actual checkout page, on the sales page, that if you’re getting a trial, you can also add this little course, it’s a book that we wrote called, checkout hacks, that has a bunch of techniques that somebody who’s buying a SamCart trial, would really, really want, and it’s 47 dollars and guess what?
On average, 30% of our new trials, give us 47 dollars. So, that’s adding to my average order value. So now, today, if we get 100 trials and 30 people give us an extra 50 bucks, I just made 1500 bucks. So, I’m starting to, to kind of chip away at that 15,000 dollar investment in traffic. And guess what? We have one click upsells that they see immediately after buying, where I might say, “Hey. You know, I have this other thing that you might wanna buy, and I have this other thing that you might wanna buy.” That is how it, the, the bigger your average order value is, the more you can spend on traffic, the more that you af, afford to spend on ads, whether it’s YouTube ads, or I, Instagram ads, Facebook ads.
The more money you’d have to build a team to get organic traffic, like this works across the board. Um, uh, the biggest thing to take away is most likely your average order value right now, your average cart value is the price of your product, because the only thing you are trying to sell is the price, uh, is your one main product, it’s a 10 dollar eBook and your average order value is 10 bucks.
Get your average order value up and the way you do it, is the, number one, the, the best place for you to start is add an order bump, add something else that somebody can, when they’re checking out, they can click a little button and that’s what we built into SamCart, because that’s one of the most important things, this topic is the most important thing for you and your business right now, I guarantee it. And that’s why this kind of stuff is built into SamCart and why people that use SamCart, make five times more than every other tool out there. Um, so come up with an idea.
What is their, what is something that, when someone’s going through your checkout process, that they can click a button, add something to their cart, before they buy. Think about it like, the little annoying candy aisle, when you’re at the grocery store, and they’re just teasing you with Snickers bars and gum and Tic Tac’s, and batteries and all kinds of crap that none of us need, but one out of every 10 people, you sit there … Go to the grocery store today. Sit in the line and just watch people and count how many people I, out of 100, but, grab something from that shelf. And, you start adding that up and that’s why grocery stores make so much as they do.
Go to Amazon, and try to buy something without Amazon offering you something else to add to your cart. It’s physically impossible. Why is it physically impossible? Because they understand the value of increasing the average order value, period. It’s why they’re one of the biggest companies in the world. Uh, go to Apple. Go to their website. Try to buy an iPod, iPad, whatever, and look at all the crap they try to get you to add on.
You can’t buy a laptop without them giving you one click of a button, lets you upgrade the ram, uh, the hard drive, the processor, the screen size, the color, power cords, Bluetooth accessories. It’s freaking endless. Why? Because Apple knows, if they didn’t do those things, and they just gave you the basic laptop, and that was the only option, that everyone would just spend 1500 bucks.
And guess what? When I went and … Look at the laptop I’m recording this on right now, I went in, grabbed the best laptop that they had, and then realized, “Oh my God. I could upgrade the RAM, the hard drive, everything else,” and by the time I was done checking out, that 2,000 or I think it was like, the sticker price was probably 1800 bucks. By the time I was done checking out, I had spent 3600 dollars. 3600 hundred dollars, almost doubled what I was worth to them. And I’m not alone. I guarantee people do that every single day on Apple’s site. Instead of them making 1500 dollars on average, they’re probably making 2500 dollars on average. That changes your business, when every customer is now worth twice as much money. It fundamentally will change your business.
Um, so anyway, we made a, um, we’ve been doing this the last couple times. We made a little, um, cheat sheet. You can hear me. I’m holding it right now. Um, you guys can get this uh, by going to Brianmoran.com/104. Uh, this is episode 104, hard to believe it’s already been 104 episodes, um, on this thing, but I made this little sheet that just lets you figure out what your average order value is, and then list out a bunch of ides for order bumps. Um, that’s, there’s a bunch of ways to increase your average order value, and order bump, just a little box where they can tick that little check box and add something else to their order, is the easiest way to do this. It’s the, the least friction.
Don’t worry, I’ll teach you other ways later on. Um, but just some little bite sized product that they can click a box, and all of a sudden, you’re making more money every single time somebody goes through the process. Um, so you can get this little sheet that I’m holding right now. Um, Brianmoran.com/104. Um, and that’s all I got. If you’re looking for an easy way to launch your business online and start making sales, or a simple way to get fast cash out of your already established business, then check out how I’m making 1729 dollars, per day with a simple one page website. I break it all down over at 1pagefunnel.com. That’s the 1pagefunnel.com.