One of the most common mistakes in the online shops world is to forget about the average checkout price. This metric, ignored by many, has a direct impact on profits.
Increasing your average checkout price doesn’t only mean increasing your income, it will also improve your profit margin and reduce costs.
Do you want to know the best strategies to increase the average checkout price and therefore your overall turnover?
If so, don’t stop reading because today at Doofinder, we are presenting the 8 best strategies to do so.
What is the average checkout price?
If you are about to launch your online shop or if you already have one, you must be aware of how important it is to measure your actions.
We are talking about the metrics that show you whether your business is on a good track or not. For e-commerce, there are 6 KPIs or indicators that we must monitor often.
Sales: you have to know how much and of what you are selling, as well as the profit margin.
Conversion: this indicator is the result of dividing the number of people who bought by the number of people who visited the shop in a period of time. A low conversion rate might mean a necessity to improve your design or the texts of your products cards.
Shopping cart abandonment rate: when high, a security problem may exist or the system may be difficult to use for the user. Have a look at this post about how to recover abandoned shopping carts.
Acquisition cost: how much money we need to gain a new client.
Returns: they help us know the satisfaction level and if there is any product that needs a better explanation.
Average shopping cart or checkout rate: how much money your clients spend on average in your shop.
What you just read is, in fact, the definition of average checkout price. However, that doesn’t really help you know why it is so important.
This variable is one that you need to improve for the following 3 reasons:
It increases the global invoicing
It improves the margin
Shipping costs are cut down
The truth is that the future looks great regarding this. According to the Ministry of Industry, "almost 44% of the online businesses polled think that their numbers will improve regarding the average volume of sales, of which 15.63% think that this number will be more than a 10% increase in their average checkout price”.
This figure means that users are getting more confident when buying online.
However, just because the predictions are good, we cannot forget about trying to increase your average checkout price. Remember that the possibility of increasing the profit margin will highly depend on this.
But before starting to learn about the strategies that you can use to improve this metric, we want to remind you where to find this information.
Where can I see the average checkout price of my e-commerce?
This data is shown in your Google Analytics account. More specifically, under the section “Conversions”. Then under “E-commerce” and, lastly, “General View”.
Your average price is the number shown as “Average checkout price”.
Don’t know how to set up Analytics for your online shop? Then, read this post about how to install it.
How to increase your average checkout price to increase your income?
Now it’s time to start talking about the different strategies that you can use to improve the average sale price of your shop.
1. Promote your bestseller products
It is common for shop owners (both online and offline) to get frustrated when they can’t manage to sell certain products.
The pressure to sell the stock is so high that they don’t realize that the easiest way to increase sales is to promote what actually works.
Though it’s important not to get stuck with products (if you sell without stock you won’t have that problem), don’t ignore this point. If you already know which products are the bestsellers, help them get sold even more.
This will not increase the average checkout price directly, but it will get you more clients. And, as we’ll see later, loyal clients normally have higher average checkout prices.
2. Free shipping
This is one of the classic strategies in order to increase the average sale: offering free shipping when spending more than X euros.
When clients see that they are about to reach the free shipping level, they won’t hesitate to add something else. You have to be careful and take into account two variables:
Don’t offer free shipping for a very high quantity: not only will you not make sales, but some clients may become angry. You should set the level at just a bit higher than your current average price.
Have a look at what you are spending on shipping: depending on what items you are selling, adding an extra product may increase your shipping cost so that it wouldn’t be worth it.
Mention that the shipping cost will be free after spending a certain amount of money in the products cards along with what they have left to reach that minimum level (some checkout plugins will allow you to add this information).
Cross-selling is one of the most common ways to increase the average checkout price.
When clients read the product card they are interested in, they will see other related products. In some shops you will see it as “other products you may be interested in” or “other people also bought”.
The more personalized the offer is, the more efficient the strategy will be. For example, there are plugins that show related products regarding the sales history of the client.
If you still don’t use cross-selling in your e-commerce, it is compulsory to read this post about it.
Cross-selling’s sister, this technique is also about offering other products to the client.
However, in this case, instead of offering a related product, it will be the same one, but better. It doesn’t matter if it’s about the quality, the characteristics, or the functionality; the important thing here is offering the clients a product like the one they were looking at, but more expensive.
This is very common with online software. They always show you different options with different prices, including more or less functions.
5. Loyalty programs
This is a very useful strategy if you sell perishable products, such as replacement parts.
These loyalty programs are about rewarding clients’ purchases with points that will be exchanged for discounts. But how does this increase the average ticket price?
It’s easy. If they buy just one, they will get 5 points, for example. However, if they buy 10 pieces, they will get many more points.
Remember that to make this 100% effective, they have to be perishable products, but not products that break. For example, razors, batteries, stationery material, etc.
6. Foster loyalty so your clients buy again
As we mentioned before, fostering clients’ loyalty is a very effective method to increase your average price and to get more sales.
When clients “survive” the first purchase and they are satisfied, they start trusting the shop. And this means that there is a high percentage of probability that they will buy again from the same shop.
And furthermore, that whenever they buy again, they buy more than one product.
According to this RJMetrics study, a loyal client can buy between 3 to 5 times more than a new one.
7. Products packs
Another top strategy is this one: if there are some complementary products, put together some packs at a better price.
This is very common for cameras. In fact, there are normally different packs:
Simple: camera + cover
Medium: camera + second lens + cover
Pro: camera + second lens + tripod + cover
These packs are very useful for selling those products that are not of great quality or that are more difficult to sell, whatever the reason is.
Coupons are another interesting technique for increasing our average checkout price, especially when combined with strategies to foster clients’ loyalty and cross-selling.
For example, we have a client that just bought one of our products. After a week, and thanks to our email marketing, they receive an email.
Besides thanking them for their purchase, we send them a coupon for their next visit that they will only be able to use when spending a minimum amount.
And what’s next to that cupon?
A list of products related to their first purchase.
A lot of times, the client won’t buy several articles at the same time in case something is wrong”. But, now that you’ve won their trust over, it is more probable for them to buy several products at the same time.
Do you know any other strategies for increasing the average checkout price?
In this post, we’ve only mentioned 8 strategies to improve the average purchase, but there are many more.
Do you know any other strategy that has been proven to yield great results? Are you keeping any secret so that your clients buy several products?