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Increase order value without impacting CX

12th Jun 2017
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Marketers are constantly seeking out ways to make more money from their customers. There is nothing wrong with this line of thought, as it is widely known that it is cheaper to market to an existing customer than acquire a new one. However, in their bid to increase the average order value (AOV), businesses resort to spamming and aggressive promotional tactics that are bound to dramatically impact customer experience.

The good thing however is that you don’t really have to resort to aggressive sales tactics to get your customers to repeatedly buy from your business. In this article, we will take a look at some interesting psychological tips that can help your business dramatically increase the order value of your customers.

Price anchoring

Do you think $100 is a good price for a brand new iPhone? Chances are you think it is a wonderful deal simply because you already know that a brand new iPhones can cost much more than this. Human beings rely on the first piece of information they receive to judge what they hear next. In psychology, this is called ‘anchoring.’ In other words, the best way to sell a $100 product is to put it next to a $500 product. In doing so, consumers no longer evaluate the $100 product on its merits alone but instead compare this with the $500 product to convince themselves on why this is a better deal. In short, if you want to sell your product at a price higher than what it is currently marked at, place it next to a similar product that is priced much higher.

Weber’s law

Weber’s law is normally used while determining discount value or determining product sizes. The law essentially states that there is a critical point when a change triggers a psychological reaction. For instance, reducing the price of a product from $480 to $479 is not going to find too many buyers. But there is a chance people start noticing and buying more if the price were to be reduced to $450.

So how does this help with increasing order value? One way to do this is by offering savings on higher volume purchases. Consumers may frequently find promotions on retail outlets promising savings or discounts when they make purchases of a certain order value. If your average customer today makes purchases worth $100, your promotions may offer a discount to customers who make purchases worth $150 or more. How much discount must you provide here? Use Weber’s law to determine that.

Complementary products

If you have a smartphone, you are going to need a smartphone case. If you buy shoes, chances are you are also going to need socks. Identifying complementary products that customers might need when they purchase a product is a great way to increase the value of your customer orders. At a small scale, you could manually tag each product in your inventory with complementary products that you may showcase on the product page.

But if you are an eCommerce company with thousands or even millions of SKUs, a good way to implement this strategy is to make use of big data mapping to understand customer buying patterns. You can then showcase these complementary products to your customers. A great example of this strategy in action is Amazon who have a ‘Customers who bought this product also purchased’ section, which showcases complementary products derived through big data mapping.

It is the job of every marketer to maximize the order value of their customers. However, this should not be done at the expense of the buyers’ experience. Understanding what triggers buying behavior and executing these plans can go a much farther in increasing order value than spamming or aggressive promotions.

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