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Thought Leadership & Enablement
July 11, 2023

How to Boost Average Order Value (AOV) with Personalization

Boost AOV with Personalization: Learn how to increase average order value by delivering a customized shopping experience.

Jenna Galletti
Content Marketing Specialist

Do you know that 49% of online buyers make an impulse purchase after seeing a personalized product?

Yes, it's true! Most online shoppers love to buy more and more if you show them what they want. That’s why personalization is important.

Personalization or customization is a positive way to convince online visitors to your e-commerce platform. You can make them do repeat purchases which result in a boost of average order value (AOV). 

But before going deeper into the personalization effect on your customer’s orders, let’s first understand what exactly is average order value. Then we’ll dive into some powerful strategies to leverage that will boost average order value with personalization.

What is Average Order Value?

Average Order Value (AOV) refers to the average amount of money spent by a customer in a single transaction when making a purchase. It is calculated by dividing the total revenue generated by the total number of orders during a specific period. AOV is a key metric that businesses use to evaluate the effectiveness of their sales and marketing strategies, as well as to monitor customer spending patterns.

For example, if a company generates $50,000 in revenue from 500 orders in a month, the average order value would be $100 ($50,000 divided by 500). This means that, on average, customers are spending $100 per transaction.

Monitoring AOV can provide insights into customer behavior and purchasing habits. It can help businesses identify opportunities to increase revenue by encouraging customers to spend more per transaction, whether through cross-selling, upselling, or other strategies.

What Affects Average Order Value?

Since the AOV directly affects the sales of your store, taking good measures to boost it can have an ample effect on the revenue. But before taking benefits from AOV, it’s important to know the factors affecting the key metrics:

  • Marketing and pricing strategy.
  • Segmentation of customers.
  • Customer loyalty.
  • Delivery options.

And lastly, personalization. 

What is E-commerce Personalization and How is it implemented?

It is a way for online retailers to build a customized experience for each customer who is visiting their online store. But how can one online store owner do it all by himself?

This can be done by leveraging any of Jebbit's interactive, engaging, online experiences, such as:

  • Product Recommendation quizzes
  • Personality quizzes
  • Interactive Lookbooks
  • Trivia Quizzes

And more!

All of Jebbit's experiences collect zero party data about the customers, which include:

  • User’s past behavior.
  • User’s preferences.
  • Their interests.

E-commerce personalization involves delivering a customized shopping experience that caters to the unique needs of each customer in your target audience. It goes beyond mere item suggestions and relies on zero-party data, which is actively provided by customers themselves. This data is utilized to personalize product recommendations, content, communications, and other aspects of the shopping journey for individual shoppers.

By leveraging zero-party data, retailers gain access to exciting new possibilities. They can effectively retarget and attract repeat visitors by offering products that align with customers' desires and requirements.

Personalization as a custom ecommerce solution can be achieved by considering factors such as a user's demographic segment, browsing history, and previous purchases.

The more your visitors are satisfied, the more customer engagement you can get. Remember, increased engagement means increased AOV. 

Now before diverting your attention from the core point ‘How to increase average order value (AOV) with personalization’, let’s learn it!

Powerful Strategies to Boost Average Order Value with Personalization

Average order value has a lot of untapped potential, but it is often neglected because of other terms like conversion rate. But AOV has its place as it provides deeper insights into customers’ buying patterns. This decision-driven strategy can have a direct impact on the marketing journey. That’s why, here we have outlined powerful strategies for boosting AOV by personalizing your customer’s purchase journey. 

You can offer a gift on a minimum purchase

Is there anybody who doesn’t know the power of ‘Free’? 

Getting something for free is always magnetic for most customers regardless of any industry. You can offer a gift to your targeted customers on the purchase of the minimum amount that you decide. When your customers meet the average bucket value, you can offer them a freebie. 

This strategy drives AOV for your brand to a good extent, but beyond this, you can have more benefits from the power of ‘Free’:

  • It protects the perception of your brand as you don’t need to fetch conversions with discounts. 
  • It helps to improve customer retention as you can get the customer to try your product as a freebie. Suppose you are introducing a new product in your online store, most people will come back to purchase it if they like it. 

You can give ‘Buy More, Save More’ offers

You can encourage your customers to shop more with hierarchical or tiered discounts. Tiered discounts are used for Buy More, Save More campaigns. Such offers lure the shoppers to increase their cart value which will boost the average order value. 

And when you combine this strategy with personalized discounts, you can work better for discounts. Such tailored discount campaigns with save more offers can give the benefits:

  • You can fastly sell your inventory at once that you want to clear out.
  • It also eliminates the customer’s guilt of purchasing more as they are getting the best deals at the best discounts. 

You can give an in-cart incentive

The in-cart incentive is an effective way of promotion to enhance average order value and also reduces cart abandonment. It helps you to give highly relevant discounts or offers to your customers before they clear their carts. 

The most probable reasons why customers abandon their carts:

  • You ask them to make an account before purchasing.
  • They don’t like the price of the item on your website.
  • The pricing is not clear.
  • You make a long checkout process.
  • And lastly, the lack of trust in your brand.

Try to improve these points as much as you can. Like, you can make a simpler checkout process, or you can allow the customer to buy from your e-commerce website without filling out any long account form. 

For items with a high price, you can send personalized emails to the customer with great discounts. This will surely reduce the cart abandonment rate and enhance the AOV. 

You can opt for on-site personalization

Do you think personalized emails are the only way to attract customers? 

You may be wrong then! 

Apart from sending emails, your website is the most likely place for displaying personalized products and schemes. One of the major reasons behind this is the brand trust that your customers have through your website. And as per my concern, many people think email promotions are spam. People just discard them without even opening them.

But with on-site personalization, you can overcome this issue. You can give product recommendations on the home page or the product page.  

Product recommendations are of two kinds mainly: One shows the main products, and the other is for the complementary products. Suppose, one of your customers is interested in buying one pair of jeans, and you recommend a belt at a very good discount. The probability is they will buy it, so you already enhance the AOV. 

You can set up a loyalty plan

Loyalty programs are a great initiative to boost average order value. You can give reward points to your loyal customers. 

After a certain purchasing limit, you can provide rewards to the buyers. And customers can use these points to purchase more. This results in repeat purchasing and enhancing the AOV. 

The important point to learn here is to set the minimum amount limit on which the rewards are applicable. The minimum amount spent can directly affect the order value. But make sure to customize the loyalty plan before implementing it. 

So, if you don’t have a loyalty program now, set up one to lure more and more customers. 

Make Personalization Your Top Priority

Personalization should be a top priority in this competitive era of online shopping. Apply personalization and you are ready to boost purchasing habits of the customers and the average order value of your e-commerce store. 

But before bringing personalization to your online store, here are some brief tips for you:

  • Make sure you are transparent about collecting data from customers and using it at different points.
  • Make sure to completely protect the gathered data from customer insights to protect their privacy.
  • Respect the user’s preference to opt out of personalized promotions.  

There you have it, ‘how to increase average order value with personalization’. Try these strategies with Jebbit and open your pocket to receive more and more bucks! 

Jenna Galletti
Content Marketing Specialist

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