What Does AOV Mean? 5 Ways to Drive It Up

Sometimes, it’s not just about having a great product (it helps though). 

You should also focus on the metrics that matter.

One of the most overlooked metrics is what’s called AOV (no, that’s not a typo).

Ever wonder how much the average customer spends at your store? 

That’s what it tells you. 

A higher AOV means customers are buying more per visit —

Which can significantly boost your bottom line.

For example, a study found that two things matter particularly for e-commerce: 

• Conversion rate 
• Basket value

Getting them to buy is one step. 

But getting them to come back and buy more is more important.

So yeah, if you’re not thinking about this metric… 

It might be time to change that. 

What does AOV mean?

AOV stands for Average Order Value. 

Basically, it’s the average amount of money your customers spend per order. 

How do you find it?

The formula is fairly simple.

So, let’s say you sell t-shirts for $20 each. 

If you have 10 orders in a day, with an average of 2 shirts per order…

Your AOV would be $40.

It tells you how much each customer spends in one go. 

The higher the value (AOV), the more money you make with each sale.  

This means you don’t have to chase after new buyers constantly. 

Instead, you can focus on making more money from the ones you already have.

On top of that, AOV also helps you understand your customers better.  

You get to peek into their shopping cart and see what they love to buy more of. 

This lets you customise your offers to their desires — 

Which usually means more happy customers and more sales.   

Basket size — and value — does matter

We all want to see those sales numbers climb, right? 

Focusing on AOV can help you do just that. 

Imagine you have 10 customers, spending $20 each. 

What if you could nudge them to add more to their cart, bumping the average spend to $30 each? 

Suddenly, you’re looking at a 50% jump in revenue — from the same number of customers.

And here’s the thing: acquiring new customers can be expensive. 

You need to spend time and resources on new ad campaigns. 

You also need to launch strategic discounts/offers to attract them

When you double down on improving your AOV instead, you can skip all that. 

Instead, you focus on the people who already like what you sell. 

That could be a smarter way to grow your business. 

It’s a good way to get more cash flowing in without having to constantly chase after strangers online.

5 ways to increase AOV without hiring a CRO for $10,000s

You don’t need to work harder.

You just need to work smarter. 

Here are five easy strategies to help you get more from every sale.

Way #1:  Upselling — offer them to buy more

Ever notice how when you order a coffee, they ask if you want to “size up” to a large? 

That’s called upselling. 

It’s suggesting a higher-priced version of a product someone is likely already interested in. 

This simple strategy works because people appreciate a little guidance — 

Especially if the “upgraded” option offers more value.

Because let’s be honest…

A couple more bucks for so much more caffeine?

Yes, please. 

Here’s how you can do it: 

• Don’t just say “want fries with that?” Explain why it’s better than what they were originally planning on buying. 
• Put the good stuff right up front. Show the other products close to the main product someone’s already looking at. 

But upselling is also an art. 

You can’t just go straight to offering more items to everyone. 

People need to feel the urge to spend a little more without feeling pushed into it.

First, figure out which products have upgrades that customers might love. 

They have to compliment the main thing they buy.

Then, if you have a team, show them the ropes. 

Train them on how to explain the cool upgrades without being pushy. 

The more you do it in a way that’s not salesy, the more you sell.

Finally, don’t be afraid to experiment. 

Try different upsell techniques and see what makes your customers tick. 

By upselling strategically, you’re giving them a chance to get something even better — 

And your AOV gets a happy little bump.

Way #2: Cross-selling – pair perfect products together

From chips and salsa in your local grocery store… 

To that burger, fries, and drink combo for your weekend cheat day meal… 

You see product bundles everywhere. 

Businesses often put things people usually buy together and sell them as a set. 

When you do this, you’re more than saving your customer a trip to grab both. 

It’s a sneaky way to bump up your AOV. 

So what’s the psychology behind it? 

Bundling creates a sense of higher perceived value. 

People think, “Wow, I get these two things together for a discount? Bargain!” 

This prompts them to spend a little more than they might have on a single item.

And it’s often done smoothly that people don’t even notice. 

Think about it…

When a makeup brand bundles lipstick with matching lip liner, it makes sense, right?  

Plus, it gives the idea that you’re getting a good deal. 

Here’s how you can do it, too: 

• Pick perfect pairs. Think about things people naturally use together. Better yet, bundle up items that they would be buying together anyway. 
• Offer different bundles at different prices. This way, everyone can find a deal that fits their budget. You can’t accommodate everyone though.
• Make sure they know how much they’re saving. Everyone loves a good deal — and this will make your bundles extra tempting.

Way #3: Value-Adding – ship stuff for free

Free shipping removes a major hurdle at checkout. 

Studies show that it makes customers more likely to complete their purchase…

And feel like they’re getting a fantastic deal.

So how can you use this to your advantage? 

Let’s talk about the free shipping threshold. 

This is simply the set purchase amount that customers need to reach to qualify for free shipping.

The trick is to pick just the right number.

It needs to convince them to add a little more to their cart and get their orders shipped for free — 

All without making them feel like they’re spending way too much.

So, how do you know you’re hitting the right spot?

Here’s a simple formula you can use: 

Free Shipping Threshold = Average Order Value + Average Shipping Cost – Minimum Profit Margin

This formula considers these things:

• Average Order Value
  You can find this number easily in most sales tracking tools.
• Average Shipping Cost
  Add up all your shipping costs for a certain period and divide it by the number of shipments.
• Minimum Profit Margin
  This is the least amount of money you need to make on each sale vs your COGS.

Remember that these don’t take the nuances of your business or niche into account (customer behaviour, competitor offers, etc). 

You’d really need to experiment. 

Pick a starting point and see how it affects your AOV over a sales period. 

Try out different free shipping amounts (A/B testing) to see which one gets the best reaction. 

And always be checking how your free shipping threshold is doing. 

If it’s not working, keep adjusting the amount until you find the Goldilocks number. 

Do this right and it’ll definitely pay off. 

Way #4: Loyalty Programs – reward repeat buyers

Loyalty programs are tried-and-tested systems businesses use to improve their lifetime gross profit. 

Basically, to keep people coming back. 

There are different ways to run one. 

Some offer points you can redeem for discounts or free stuff.  

Others have tiers, where the more you spend, the more perks you unlock. 

Either way, customers feel special because they get rewarded for shopping. 

Of course, businesses also see their sales go up because of repeat –  and often bigger – purchases. 

Here’s what you can do to start your a loyalty program to boost your AOV:

• Get people to spend more to get more. The goal should be encouraging checkouts of bigger carts to unlock freebies and discounts.
• Nudge them towards adding a little extra. Tiered rewards, for example, can offer a higher discount percentage to exclusive products with larger purchases.
• Highlight their progress towards rewards. Show customers how close they are to unlocking the next-level spending goal.

Way #5: Using Psychology – trigger their FOMO

Limited-time discounts are amazing sales triggers. 

It creates a sense of scarcity, urgency, and a fear of missing out (FOMO). 

These make people more likely to snag that deal before it disappears.

Okay sure, it sounds counter-productive. 

How can you get a bigger order value by giving them lower prices?

Believe it or not, these offers can actually work in your favour. 

People might be drawn in by a discount on a single item…

And then see another tempting product and add it to their cart to reach the free shipping threshold. 

This then leads to a higher overall purchase value.

It also triggers another thing that you’d surely like: immediate purchase. 

Because the offer won’t be around forever, they’re less likely to leave items in their cart “for later”.

Here’s how you can use these offers for better AOV: 

• Make it disappear fast. Shorter sale periods create a feeling of “act now or miss out!”. 
• Don’t hide the deets in tiny text. Make sure the discount is clear and attention-grabbing, like at the top of your website.
• Use them to remind people why they love what you sell. Focus on why your products are great alongside the price knock-off.

Most importantly, don’t discount yourself out of business. 

Constant sales blitzes can make a brand seem desperate. 

Instead, use limited-time offers strategically — like during slow periods or to introduce new products.

The main thing is you’ve got a purpose: to attract more customers at a lower CAC or to expand your customer base to sell them more in the future.

Is AOV the CPR your flatlining sales need?

Maybe.

But that’s not the end all and be all of everything. 

Knowing your AOV is great, but it’s not exactly a magic money machine.  

Remember, every business is different. 

This means you’ll need to experiment a bit to see what works best for you.

Dig into your sales data and calculate your current AOV. 

Then, try out the strategies above and see what works for you. 

Don’t overwhelm yourself. 

Pick one strategy to implement first. 

Test it for a set period and track your AOV to see the impact.

Once you’ve mastered one strategy, consider adding another.

The more you experiment and refine your tactics, the stronger your AOV strategy becomes.