5 Ways to Increase the Total Revenue Per Order

 

Driving success in your online business is all about gently nudging your shoppers by exposing them to selections, opportunities, and impressions that lead to fuller shopping baskets. As the busy holiday shopping sales season begins, the retailers that will emerge from the other side with profits are those who guided their customers to make specific shopping decisions, and to purchase items with higher profit value.

Often, what characterises your campaign periods is a high turnover partnered with a low margin. The following five tips will help you increase your total revenue per order. Increasing the average order size in your shop is beneficial because:

  • Every order comes with costs, whether it’s shipping, packing, processing, or more.
  • There's a better chance that items with higher margins will end up in your customer’s shopping basket.
  • You will end up with larger gains from your customer’s purchases.

1. RAISE YOUR FREE SHIPPING MINIMUM
If you’re already selling your products at a low margin, you could end up with direct losses if you’re offering your customers free shipping. During the sales season, try adjusting the free shipping minimum (if you offer this in your shop), as often, a few euros can make a huge difference in terms of your profit.

Also, consider limiting free shipping to the lowest-cost shipping, so customers will still have to pay shipping costs for flexible delivery to their home address.

In addition, your free shipping minimum should be strategically designed in terms of the average order size and product sales price. For example, if you often sell products within the sales price range of 20-30 euros, then a free shipping minimum of 35-40 euros might provoke higher order values.

To approach this practically:
  • Adjust the free shipping minimum for your shop during campaign periods.

  • Perform ongoing calculations on your shipping expenses so you are always aware of your outgoing expenditures, and how much it costs you to offer free shipping.

  • Offer free shipping only on the lowest cost shipping opportunity and charge customers for more flexible delivery.

2. CREATE PRODUCT RECOMMENDATIONS
Automatic product recommendations have a significant influence on the order size in your shop. Customers want to be inspired, and the great thing is that most software systems feature this function out-of-the-box. We can highly recommend services such as Raptor Smart Advisor or Nosto for intelligent recommendation that provides product suggestions based on purchase history, customer behaviour, and configured preferences. Automation ensures continued optimisation and the results are more than convincing.

Automatic or not, the recommendation in your shop should be adjusted during campaign periods to ensure that the suggested products fit your strategy to increase customer shopping basket sizes.

To approach this practically:

  • Use intelligent recommendation that automates the product suggestions in your shop.

  • Make sure you have the opportunity to manage the automation on those products that are highly convertible.

  • Adjust recommendations during campaign periods to make sure that campaign products with a low margin are not the ones being suggested to customers.


3. MAKE MONEY ON ACCESSORIES

Accessories are an add-on service which we often don't buy during sales. When we are talking about traditional retail, however, this is where stores bring in the most profits. For instance, if you purchase a television, the revenue is often higher on the television’s accessories than on the television itself. Use this technique in your online business, as you are most likely able to find relevant accessories to many of your product groups, and if the price of the accessory is lower than the price of the product, you have a chance to increase your revenue.

You most likely already know which of your products are your best-sellers; now, find the relevant accessory and include it on the product page. If your system allows it, you could even work with bundled products, where you bundle an accessory together with the product to illustrate the additional saving for the customer, while still conducting a profitable business.

To approach this practically:
  • Identify accessories for all your product groups; consider doing a brainstorm with your team to determine the best products.

  • Do a manual match between accessories and products, and focus on items with high turnover first (this may require development).

  • Create product bundles, where you bundle together your best-selling products (that attract both traffic and turnover) with highly profitable accessories.

  • If possible, do explain the correlation between the product and the accessory, so the customer knows why to buy the accessory.


4. OFFER ADD-ON SERVICES

We often wonder why only a few web shops today offer add-on services. These could include faster or more flexible delivery, gift wrapping, the additional of a personal card, and more. These add-on services are the perfect incitement for a higher minimum order, an advantage that will set you apart from your competitors or just as a product to increase revenue. Many customers are more than willing to pay for extra services, especially when it comes to the holiday season, where many purchases are gifts.

To approach this practically:

  • Think of extra services your customers might consider purchasing.

  • It’s difficult to charge customers for a service that you used to offer for free; experiment with the prices before you potentially offer a service for free.

  • Services could also be specific within product groups, such as installation, next-day delivery or a special gift wrapping.


5. STICK TO A PRICING STRATEGY

Draw inspiration from retail, an industry that knows how to exploit the potential of a strong price strategy. In retail, merchants plan ahead on which products to market with specific sales prices. You could use the same tactics to remain firm during campaign periods, during which time you can advertise stronger sales prices. Remember to keep yourself updated on rules and regulations when it comes to setting prices.

To approach this practically:

  • Include products and prices when planning your campaigns to document prices before, during, and after sales.

  • Don’t mark all of your products on sale at once; stretch out your campaign period by making ongoing offers.


With these tips, we're sure your profit baskets will be just a bit heavier after the 2016 holiday season! Happy selling!




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