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3 tips to increase your AOV for your subscription business

If you are not familiar with the acronym, AOV stands for Average Order Value. Simply put, AOV is the average dollar amount that consumers spend on your ecommerce website. In order to calculate your AOV, you divide the total revenue by the number of orders that your site has received. For example, say that your business did $200,000 in a month in sales from 1,500 orders, your AOV would be $200,000 divided by 1,500 orders, or $133.33.

This may go without saying, but the higher the AOV is for your ecommerce business, the more beneficial it is for you. Not only will your business be making more money per order, but with a higher AOV, you are more likely to see a positive ROI with your marketing spend. Both of these factors will help put less stress on your customer acquisition funnel and will help make your ecommerce business run more efficiently.

However, increasing your AOV when it comes to your subscription business can be a bit tricky. Since one of the benefits of a customer subscribing to a product is that they receive it on an ongoing basis (i.e. it is being replenished), they may be less likely to go to your website organically in between shipments to add extra products to their next shipment (which would increase your AOV). With that being said, it’s possible and important to increase the AOV of your subscription business by trying to cross-sell and upsell complimentary products to your subscribers. The more products that subscribers get exposed to, the more likely they become to potentially subscribe to a product indefinitely which is a key driver of increasing not only your AOV, but also your LTV (customers lifetime value).

Read on to learn tips and tricks on how to increase the AOV of your subscription business.

Leverage email to market complimentary products to subscribers

Email marketing is a powerful way to engage directly with your subscribers and grow your entire retention business. However, just sending an email is no longer enough to drive impactful results. You need to take it a step further and send out personalized emails to your subscribers in order to see tangible results.

Let’s say that you run a coffee subscription business where you have 1,000 subscribers who receive a pound of coffee every 30 days. Rather than just being content with those 1,000 subscribers getting and paying for their pound of coffee every 30 days, send those 1,000 subscribers an email promoting a complimentary product that could go along with their coffee. Perhaps you could promote a mug or a specialized coffee scoop.

By being direct, personalized and providing a clear use-case to your subscribers in your outreach, you can highlight the need for them to purchase a complimentary item to go along with their subscription in advance of their next shipment. Perhaps some of your subscribers will elect to add more than just a mug to their next order which will only benefit your business. While this tactic may seem rather elementary, it is a surefire way to increase your AOV for your subscription business and takes little time and effort on your part to drive results from.

Craft your product detail pages (PDPs) in a way that highlights complimentary products

If you are not familiar with the term PDP, this is where a site visitor learns more details about the product; for example what variants (sizes/colors) the item comes in, how much the product costs, what the product looks like and other pertinent product details. And most importantly, the “add to cart” button lives on the PDP, meaning your PDP pages are where your sales come from. These pages are typically accessed by a site visitor clicking into them from a broader product or collection page.

The best ecommerce sites and operators obsess over the content and details that live on their PDP’s and are constantly iterating over minor details. These details include what color the “add to cart” button is, where it is placed on the page, how the copy reads, and what color the font is for example. A well crafted PDP can be the difference between a visitor turning into a customer or bouncing from your site and never coming back again.

So when building out your PDP, it’s not only important to make it frictionless for a customer to checkout, it is also important to think about how you can showcase complimentary products that go along with the product on the PDP. For example, Ursa Major, a skincare brand does a great job showing at the bottom of their PDPs items that go well with the product on the PDP.

Ursa Major

This is a powerful way to increase your AOV for your subscription business by either trying to get subscribers to subscribe to more of your products or buy these items on a one-off basis. Explore more details on how to optimize your PDPs here.

Offer subscribers special incentives to try new products

Subscribers are some of your most loyal customers. Based on research put out by Shopify, you have between a 60-70% chance of selling to an existing customer versus a 5-20% chance of selling to a new prospect. Knowing that you have a captive audience in your subscribers, leverage this group of subscribers to get them to try new products.

Perhaps you want to offer your subscribers a special one-time promotional code for 20% off their next non-subscription order in an effort to get them to try a new product. Based on the research outlined above, it’s likely that they would be inclined to purchase a new product using that offer to try it out. As such, this will be yet another way to increase your AOV while saving your marketing dollars chasing after net new customers.

Increasing your AOV in a subscription business is often overlooked with subscription businesses constantly chasing net new subscribers. However, it’s important to remember that your current subscribers represent a great potential audience to tap into in an effort to drive additional sales at no cost that help you to increase your AOV and become a more efficient and profitable business operation as a whole.

If you want to learn more about the tools that Upscribe offers that help you increase your AOV, schedule a demo with our team here.