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3 Ways Your Subscription Business Can Increase its Average Order Value (AOV)

  • Walter Long and John Roman - Growth & Marketing Committee Co-Chairs
  • Nov 29, 2021
  • 4 minute read

Average order value (AOV) is a way to track the average dollar customers spend each time they place an order. Naturally, when customers spend more money per order, the business sees a higher total revenue. So how can your subscription entice your customers to spend more and increase their AOV?

While raising the prices of your offerings can certainly increase AOV, subscribers want to feel like they’re getting more value when they spend more. There are several low-hanging fruit options within the purchase process that enable you to increase AOV without raising the cost of your subscription product or service.

AOV Tip #1 – Add Actionable Additions to Your Checkout Process 

Like the rows of candy and other impulse buys that line the checkout aisles at the grocery store, your business’s checkout page is a great spot to catch your customers before they finalize their purchases. There are three places in a user’s checkout journey where you can offer upsells and add-ons.

  • Pre checkout. When a user adds an item to their cart, it presents an easy opportunity to suggest an upsell or similar add-on items. They may be at a discount or simply be complementary to items the customer already has in their cart.
  • Checkout. The vast majority of users are pretty set in their buying decisions by the time they’ve reached your checkout page, so this presents another opportunity to increase that AOV. Right before the customer places their order, consider setting up a final page of add-ons that complement their existing purchase.
  • Post checkout. A new customer has placed their first order! The user was confident enough in your brand to purchase from your site, so why not offer them something else? A follow-up email with suggested items based on their previous purchase can entice them to come back for seconds — especially if they’re happy with that first order!

Monitoring your sales funnel performance is paramount. Make sure you first organize your products by the initial offer that was accepted and then filter in on the subsequent products that are purchased (in order) to determine the sequence that creates the highest AOV. Finally, make sure to view the initial cart value (at initial checkout) and the final cart value to determine lift. 

Identifying customer behaviors as they move from their initial product purchased to other products will help direct marketing efforts. Are there cohorts of customers that have a higher tendency to convert to a subscription? Are there correlations of upsell take rates and the marketing source or campaign in which they originated?

AOV Tip #2 – Speak to Your Audience

Whether it’s a pre-renewal upgrade, an add-on offer, or a simple suggestion that they upgrade to a higher tier in your offering, communication goes a long way. Many brands will send an email to their customers prior to renewal with add-on options that are complementary to their current subscription box. 

At BattlBox, we take an organic approach to communicating with our customers. Our four-tier offerings range from the Basic Box — priced at $29.99 — to the Pro Plus — priced at $159.99. Each time we review or discuss our subscription boxes (and even in the summary booklets that come with each box), we showcase the products in all four tiers. 

Customers who subscribe to the lower tiers see what they’re missing out on by not being subscribed to the higher tiers. As a result, we often see users upgrade to a higher tier within a couple of boxes of a customer’s lifecycle. 

Occasionally, we also tease items from a higher-tier box before renewal, giving customers the opportunity to upgrade and get that item. This is a great opportunity to increase AOV during the potentially regular process of reminding your customers of the upcoming renewal.

AOV Tip #3 – Consider New Means of Communication

Technology is always changing, so staying on top of the newest means of communicating with your customers is vital if you want to take every opportunity to increase your subscription business’s AOV. Two communication methods are especially worth considering.

  • SMS text messaging. Think about it: people are always on their phones nowadays. As SMS becomes a more acceptable form of communication with customers, opting for text messages over emails gives you a more direct way to follow up with your customers for pre-renewal add-ons.
  • Customer portal interactions. With the ability to add customizations to most platforms’ customer portals, the real estate of an online portal serves as a great place to offer add-ons before your customers go to renew their subscriptions.

When determining specifically what is working the best to drive additional revenue, make sure you’re tracking the source (e.g., SMS, email, paid media) and get a granular view within each source (e.g., campaign, ad set, ad) to best optimize. The most successful merchants use UTM parameters to filter into the numbers.

Each touch point presents an opportunity to drive additional value for your customer (and have that customer drive additional revenue for you) by making relevant product recommendations along the path to help satisfy their reasons for interacting with you. 

By tracking these touch points and analyzing the data, you can identify patterns and sequences to help you further optimize those touchpoints, enhance product positioning, and create targeted offers to drive revenue and increase your customer’s experience with your brand.

Looking for more ways to grow your brand? Discover the latest trends on how subscription businesses can expand by attending SubSummit!