Definition: It is defined by the average dollar amount spent on your website per customer.
Explanation:
In eCommerce, an important measure of a brand’s success to online shoppers is its ability to convert visitors into buyers.
This means that when they visit your site and make a purchase, they’re actually buying something from you.
Average Cart Value (ACV), also known as Average Order Value (AOV) is a very important metric in eCommerce.
It is calculated by taking the total amount of money revenue and dividing it by the number of orders.
ACV = revenue / number of orders
For example, if a company was able to generate $35,000 in sales for a month from 425 orders, the ACV would be $82.35.
ACV = $35,000 / 425
ACV = $82.35
Companies can use this information to help them decide if their products are selling well or not, as a lower average order value means that people are buying less from the business.
The higher the ACV, the better it is for the company.
Importance of Average Cart Value
Understanding the importance of average cart value can help retailers make more informed decisions about their strategies for digital marketing.
1. It helps companies understand how much they should be spending on advertising campaigns to get higher sales.
This helps them understand if their campaigns are giving them the results that they want to achieve.
If there’s no change in the number of orders after an ad campaign has been launched then this could mean that something has to be done.
2. It allows businesses to see which channels work best with certain types of customers.
For example, a business may find out that its mobile app works better than its website when it comes to attracting new customers.
This is because most people use apps instead of websites while shopping and browsing products.
3. It can help businesses determine if their pricing strategy is good or not.
If a business has set up prices based on how much money each customer spends, then this information will be useful in determining whether those prices are too high or too low.
How can I increase the Average Cart Value?
Companies are always looking for ways to attract more consumers and increase sales by enticing them with different types of offers.
But before you think about increasing the average cart value, you need to make sure you’re providing quality products that are affordable to your customers.
Quality is important because it helps with customer satisfaction.
Without quality products, the company will not be able to attract many customers or keep them for long periods of time.
The company also needs to listen closely to their customers’ needs and wants in order to provide them with the best service possible.
Once you got all these things right, your business should start growing at an exponential rate.
With that said, here are a few tips that you might want to try:
Cross-selling
Offering complementary products helps increase the average cart value since customers will be willing to buy both products together.
For example, if you sell shoes online, offering socks or tights in addition to the shoe would help boost your ACV.
Offering free shipping
Offering free shipping on products when they reach a minimum amount can generate additional revenue for eCommerce stores.
The reason is that some consumers would prefer spending their money on products instead of shipping fees.
Upselling
Upselling is a sales technique that involves persuading customers to buy items that are more expensive or of higher quality than what they originally intended to purchase.
It’s often used by e-commerce stores as a means of generating additional revenue.
Offering discounts on bulk orders
This strategy can help the business because it allows them to make more money from each sale instead of having to sell multiple products individually.
For example, you can give customers $5 off when they purchase 10 pieces of clothing in one transaction.
Discount vouchers
This strategy is an effective strategy because it allows customers to save money when they buy from you.
It also allows the company to keep prices low without sacrificing quality or service.
In addition, it helps build brand loyalty by offering incentives such as gift cards or coupons.
Giving free gifts
Offering free gifts to customers when they purchase a minimum amount is a great way of getting people interested in what you have to sell.
It’s also an easy way to build loyalty with existing clients as well as attract new ones.
For example, you can give them a free keychain or anything that they can use when they buy from you.
Limited-time offers
This is another effective strategy because they get the customer excited and encourage them to purchase your product right now before it’s gone.
It can help increase sales by making customers want to act fast on their impulse purchases.
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