There’s no need to beat around the bush, here:
As the owner of an ecommerce business, your main goal is, quite simply, to make as many sales as possible – and to make as much money as you can from every sale you make.
You also want to do so with little friction – if any.
When we say “friction,” here, we’re referring to both sides of the equation:
On your company’s side, you ultimately want the amount of time, money, and energy it takes to make a single sale to decrease over time.
On your customer’s side, you want to make the process of making a purchase – and subsequently finding success with your products – as streamlined as possible.
In this article, we’re going to discuss how you can use consumer psychology to appeal to your customers – both consciously and subconsciously – in turn making them more than happy to increase the amount of business they do with your company.
Using Consumer Psychology to Improve Average Order Value
Before we begin discussing the numerous ways to “press your customer’s buying button,” it’s important that we make one thing clear:
We’re not talking about ways to “trick” consumers into making additional purchases from your ecommerce store, here.
First of all, that would be unethical.
Furthermore, your customers are smart people; they’d either realize you’re trying to trick them before they make a purchase, and will end up not going through with it – or they’ll realize they’ve been tricked after the fact, and will never return to your store ever again.
That said, the strategies and tactics we’ll discuss here are meant to enhance the experiences you provide your customers and, again, bring them to increase their order value of their own free will.
With all this in mind, let’s dive into the strategies.
Improve Your Site’s Design
It should come as no surprise that the physical makeup of your site is a major determining factor of whether or not an individual will do business with your company in the first place.
Now, there are two overarching aspects of site design that can make or break your visitor’s experience:
You may be familiar with the phrase, “form follows function.” While the phrase was coined in reference to architecture, it certainly can apply to the design of your ecommerce website, as well.
Simply put: if your site doesn’t function properly, it doesn’t matter how aesthetically pleasing it is; your potential customers are going to head elsewhere.
And, even if a visitor does go through with a purchase despite poor functionality (such as slow loading time or a non-dynamic shopping cart), it’s highly unlikely that they’ll stick around to make additional purchases. In turn, your overall Average Order Value suffers.
At any rate, there are a number of things you need to attend to with regard to the functionality of your ecommerce site.
First, make sure your customers are easily able to find what they’re looking for – whether by browsing or by using your site’s search function.
The above example from Best Buy is a perfect example of hierarchical product categorization. Here, there’s little doubt a customer looking for a new refrigerator would be able to narrow their choices quickly and easily.
Once a customer adds a product to their cart, you want to make it easy for them to either continue shopping or proceed to checkout:
In this example from Bonobos, the customer’s cart pops up on the right side of the screen without even taking them away from the product page. By not bringing them away from the product page, Bonobos all but ensures the visitor will continue to browse around (and hopefully add more to their cart before checking out).
Another aspect that falls under site design and functionality is the information you provide your visitors throughout their journey on your site. By providing in-depth product information and high-quality product photographs, you essentially leave no question unanswered – removing any potential doubt that may exist in the customer’s mind about making a specific purchase.
Now, once you’ve ensured that your site functions properly and allows your customers to get exactly what they came for (and more), you of course want to focus on making your site aesthetically pleasing, as well.
Essentially, your goal here is to ensure your site’s design matches the overall “feel” of your brand – and your customer’s mood.
In the example above, Nordstrom’s website exhibits exactly what the brand is all about: sleek, comfortable style.
(As a quick aside, the fact that you may have known this screenshot is from Nordstrom is evidence of how important proper site design is).
With functionality in place, an aesthetically-pleasing site can definitely lead to an increase in Average Order Value, as evidenced by Style Rocks’ experience upon deciding to optimize their site’s theme.
We’ll again touch on design (whether functional or aesthetic) throughout the rest of this article as we discuss the many other ways to appeal to your customer’s psyche. As we go through the rest of the article, continue to think about how you could implement the strategies we’ll discuss in a way that’s both functionally-sound and aesthetically-pleasing.
Promote Customer Registration
You’ve probably been told numerous times that ecommerce best practices dictate you should always allow visitors to make purchases as guests (i.e., you shouldn’t force them to register an account before making a purchase).
We’re not going to argue with that; you definitely should provide potential customers with the option of making purchases as guests.
The key word in that sentence?
Keep in mind that we’re not talking about conversion rate, here; we’re focused specifically on increasing Average Order Value. While forcing visitors to register with your site will likely negatively impact your conversion rate, Moovweb found that providing the option can actually increase your Average Order Value by as much as 10%.
Now, there’s certainly the possibility that this is a “chicken and egg” scenario: Do customers who register an account become more willing to make additional purchases, or are customers who are willing to make additional purchases more likely to register an account?
But, for our purposes, this is beside the point. The fact is, registered customers spend more per transaction than guests do – so it’s in your best interest to facilitate registration as often as possible.
Of course, most customers probably aren’t going to want to register an account if doing so doesn’t provide them with any added value. And they definitely aren’t going to want to do so if the process isn’t streamlined.
So, you first want to make the value of doing so crystal clear.
You might choose to offer a discount on their first purchase upon registering – or even send them a free gift.
Or you might use their registration as entry into your loyalty program, allowing them to immediately begin building toward a larger reward (which, incidentally, incentivizes additional purchases, as well).
You also might call their attention to the fact that you’ll be able to provide more personalized recommendations based on their purchase history – which can only be collected if they create an account on your site.
Or, you could use a combination of these tactics.
Secondly, as mentioned, you want to make the process of registering an account as easy as possible.
In the example above, Lancome allows customers to register an account with a single click by linking their existing social media accounts to the ecommerce site. (Also notice that the benefits of registering are clearly stated on the right side of the screen, as well.)
Typically, when requesting that a customer registers an account, you should only require them to provide information that’s absolutely necessary to the process. While they’ll eventually be providing their address, payment information, etc., you really only need to know their first name and email address as a first step – you’ll have time for the rest once they commit to registering with your company.
Upselling and Cross-Selling
Upselling and cross-selling are two extremely effective methods of increasing your Average Order Value – when done correctly, of course.
Let’s first look at upselling.
Upselling is the process of showcasing an upgraded, updated, or enhanced product to a customer who has shown interest in a specific product. For example, a customer looking to purchase a new sofa might be tempted to buy a leather conditioning kit (this example allowed a company to generate $2,000,000 of extra revenue per year.)
While there are a number of factors that go into a successful upsell, your main concern should always be on providing extra value to your customers. Using the previous example, you’d want to make it clear that the extra space will mean there will be less of a chance of them needing to delete data and files in order to fit new games onto their system a few months down the road.
(On the other hand, if they state clearly that they’re not worried about having to do so, then you likely won’t be successful in trying to get them to upgrade.)
In comparison to upselling, cross-selling is the process of showcasing supplemental items that will enhance the customer’s overall experience with the main product in question. So, the customer looking to purchase a new PS4 might also be interested in purchasing an extra controller, or perhaps a subscription to the system’s online services.
Again, you need to focus on the value the additional products will provide the customer in order for a cross-sell to be successful.
Take a look at the following example:
There’s almost no reason a customer shopping for grilling supplies would want to buy an espresso machine at the same time. In turn, this out-of-left-field recommendation will almost certainly fail to increase this customer’s AOV.
(Sure, they may be interested in the spice grinders – but an opportunity has definitely been missed here.)
Upselling and cross-selling can be implemented using a mixture of predictive analytics, marketing automation, and customer support via live chat. Essentially, you’ll want to consult both the purchase history of the customer in question and similar customers within a given segment, and leverage your support team’s knowledge of your company and its clientele in order to provide an offer that will almost certainly resonate with the customer in question.
Another effective way to get your customers to spend more in a single transaction is to provide incentives for them to do so.
For example, you may choose to offer free shipping, a free gift, or a percentage off the customer’s next purchase once they reach a specific order value.
Nearly 60% of consumers are willing to spend more if it means they won’t have to pay for shipping
Not only do such incentives work for the purchase at hand, but they also open the door to further purchases in the future, as well. For example, the customer who receives 10% off their next purchase will certainly want to take advantage of the offer as soon as possible.
Sending a free gift along with a purchase often leads the customer to feel the need to reciprocate, as well; that is, they’ll feel as if returning to your store upon receiving a free gift from you is simply the right thing to do.
Now, the trick here is to determine where, exactly, to set your threshold. Essentially, you want to set the threshold at a level that will increase your AOV, while at the same time not going overboard.
In other words, you don’t want to set your threshold so high that your customers simply aren’t interested. Think about it: if your current AOV is $50, setting a free shipping threshold at $100 simply won’t work; your customers aren’t going to be willing to double the size of their order just to get free shipping.
On the other hand, if you set your free shipping threshold at $65, you have a much greater chance of getting customers to increase their order value. As your AOV increases over time, you can then increase the threshold accordingly (in this example, perhaps to $75-80).
One thing worth mentioning, here:
When implementing this strategy, you want to ensure that the incentive you provide doesn’t eat into your profit margin to the point of not being worth the increase in AOV in the first place.
(A quick aside regarding shipping and other such fees: Don’t wait until the checkout page to inform your potential customers about these additions; let them know about these fees upfront. The ones that leave were going to leave anyway; the ones that don’t will have incentive to spend more to reach the threshold.)
Urgency and Scarcity
Of all of the strategies and tactics we’ve discussed so far, these next two are probably the most “sneaky.”
By using urgency and scarcity to play on their sense of FOMO (Fear Of Missing Out), you increase the chances that your customers will increase their order value without hesitation.
Here’s how Amazon uses scarcity:
“Only 3 left in stock? 5-star reviews! Well, people must love this product…I better scoop one up at this price before someone else does!”
Not only does scarcity make customers want to act fast, but it can also act as social proof, as well. Like the caption says, if there’s only one unit left in stock, it must be a pretty hot-ticket item.
Now, the above example also plays on the consumer’s sense of urgency, as well. But you can also do so by offering time-limited deals, like in the following example:
Note how this example combines a free shipping threshold and urgency – essentially doubling down on an attempt to increase AOV.
One very important thing worth noting with regard to creating a sense of urgency or scarcity:
Don’t say there’s “only three units left in stock” if you have a whole warehouse full of the product, and don’t use a phony countdown timer that resets every time a customer refreshes their browser.
You certainly can artificially limit the amount of an item you’re currently selling (especially if offering it at a discount), and you certainly can provide limited-time offers. But if your customers catch you trying to toy with their sense of FOMO, there’s a pretty good chance they’re going to abandon their cart for good.
Streamline the Return Process
The easier it is for your customers to return products to your store, the more likely they are to buy more from you.
While it may sound counterintuitive, streamlining the return process can absolutely increase not only your customers’ propensity to make a purchase, but also increase the value of their purchases, as well. According to a 2013 study by Walker Sands, at least 30% of consumers surveyed said they would purchase a product that costs $1,000 or more if they were guaranteed free, no-hassle returns.
Another thing worth noting is that a large percentage of online consumers tend to “bracket” their purchases. In other words, these customers make numerous purchases during a single transaction with the intention of returning at least some of the purchased items.
This, again, sounds like it will cause more harm than good for your business, but it can actually be rather beneficial. For one thing, there’s always the chance that the customer will actually want to keep everything they purchased – even if they originally intended not to. If they do decide to return some of their purchased items, you can provide them with store credit – leading them to make additional purchases in the future.
Providing free and painless returns to your ecommerce customers takes the risk of losing money completely off their shoulders – and makes them more likely to spend more in the process.
The main takeaway from all of this is:
The more value you provide your customers, the more they’ll spend on your ecommerce site.
Your main concern, then, is discovering exactly what your customers consider valuable in the first place. You can then work on determining the most cost-effective strategy of providing this value – in turn increasing your overall profit margin in the process.
Remember: Your goal isn’t to make more money by tricking your customers; it’s to provide for them in a way that makes them more than happy to give you their business.