If you’re looking for a way to increase the revenue of your online course, your first instinct probably would be to bring in more customers. While that’s a great way to generate more revenue and grow, it’s not the only option. A very easy way to increase the revenue of your online business without putting more work into marketing is to simply increase the average order value of a purchase.
Statistics show the majority of revenue for businesses comes from returning or existing customers. It’s important to take advantage of the attention you have from your current customers. And, increasing your average order value is the key.
What is average order value?
The average order value (or AOV) is one of the most important e-commerce metrics. It indicates the average amount of money customers spend in your store or on your business in a single purchase.
You can easily calculate your online business’s AOV by taking the total revenue of your business and dividing it by the number of orders it has. It should always be divided by the number of orders and not customers.
Think about it: One customer might come back and place an order three times, and each one of those orders should be counted separately when you’re calculating your average order value.
Why would you want to increase the average order value?
There are multiple reasons why you, as an online business owner and creator, would want to track and increase your average order value.
Maximize your profit/increase sales
When you increase your average order value, you’re automatically increasing the overall revenue of your business. It’s key in running a long-term successful online business. Plus, when your profit is higher, you have more money to re-invest back into your business.
Increasing average order value is by far the most efficient way to increase your profits as it allows you to earn more money from the same number of customers. This means that you can make more money without having to increase your marketing budget or invest more time in acquiring more new customers.
Increase your returns on marketing costs
Increasing your average order value can also help with better returns on your marketing costs.
First of all, by knowing and tracking your AOV, you can better evaluate your online marketing efforts and understand if what you’re doing is working or not. With that knowledge, you can better improve your marketing strategy.
Then, when you choose to spend money on marketing to bring in more customers, employing strategies that will increase your average order value will allow you to get a better ROI (return on investment).
9 easy ways to increase your AOV
There are many different strategies you can use to increase your average order value. Here are nine effective and easy ones to implement:
1. Offer a discount
You’ve seen it before: Get 15% off if you buy two or more products. This is a tried-and-true e-commerce strategy to increase the average order value.
However, when offering discounts for purchases, remember to add a minimum spending amount for the discount to quality.
For example, offer a 15% discount when a customer spends over $100 on your product or offer a one-time offer on your signature course. Or, instead of adding a minimum spend to get a discount, you can take another route—when a customer buys one product at a full price, retarget them later with a future discount.
You have to play around and see which discount offer works the best with your digital products and your customers specifically. For Teachable creators specifically, setting up course bundling options with discounts and offering coupon code discounts to users may be the a great option.
2. Offer bundles
Like we said, another great way to increase your average order value is by offering bundles.
If you have digital products that complement each other, creating a bundle is a good option. Course bundles are usually discounted from the combined price of the individual courses as a way to encourage sales.
For example, if you have two courses that sell for $30 each, you could put both courses in a bundle which students could purchase for a total of $50. The idea is that the bundle combines related courses that your customer may be interested in. Rather than spending time in the future re-targeting them and hoping they make another purchase, you incentivize customers to make a bundled purchase and gain a $10 discount. And you increase your AOV.
Of course, if a student still only wants to purchase one of the courses, they have the option to do that as well but will miss out on the discount.
3. Create an order bump offer
One of the best strategies to increase the average order value is to offer order bumps during checkout.
Most likely, you have multiple items in your school or website. This will include higher-priced products like online courses and some lower-priced offers, like e-books, guides, or mini courses.
Offer cheaper-cost items that people can add with one click as a bump. The key here is to offer a low-cost product that complements what people are already buying. A price that doesn’t require much consideration before buying will vary from customer to customer and your overall pricing strategy.
4. Offer your time
As an online creator, your time is valuable. And, students who buy products from you would likely also buy time with you. Use it to your advantage and offer coaching or consultations to increase the average order value.
For example, if you’re selling an online course, offer multiple tiers:
- A customer gets access to the online course material at $300
- A customer gets access to the online course as well as a one-time session with you at $500
- The high-ticket offer where a customer gets online course material as well as three months of coaching sessions from you at $1,000
This is a very effective way to increase your average order value, as you’re giving customers multiple offers and prices to get your course as well as your time.
5. Offer memberships or community access
Another way to increase your average order value without giving away your private time could be by offering different tiers with memberships, access to exclusive groups, or access to your community.
You could offer a base price for the online course, where customers get full access to all material. Then add another tier, where for the extra price, customers get an invitation to your membership or community. They can then connect with other students taking your online course.
You won’t have to dedicate your own time to coaching and private sessions but can still increase the value of your offer. And, in turn, you can increase your average order value.
Nicolas Botomisy offers an All Access Subscription to his online course platform. This is a membership where he offers a private group so students can connect and share their passion over pastries and desserts. His membership subscription also grants access to monthly Q&A sessions with Nicolas himself.
People who want more than just access to one of his online courses can get so much more if they join Nicolas’s membership, which drastically increases his average order value.
6. Offer complementary products
OK, it doesn’t technically help with AOV. But, utilizing an upsell is a valuable way to increase total sales and pump up customer excitement. And, a good way to ensure students are getting the most of your products is to add an upsell option to your “Thank You” page post-purchase.
Consider offering mini courses, partner courses, or advanced courses that will add value to your students’ learning experiences. These upsell options will not only give eager paying students more ways to learn, but will also give them an opportunity to make a relevant purchase when they’re already ripe to buy.
Plus, you can use this strategy to test out which courses are popular upsells. And then, you can use this data to create partner courses, bundles, and even higher value courses in the future.
7. Create time-gated offers
Another tactic that’ll allow you to increase the average order value is offering time-gated offers to customers.
Create urgency and exclusivity with your digital shop or online course, encouraging people to buy now and buy for more. FOMO is a real thing, and it’s a very effective sales tactic.
For example, if you have multiple products on your digital store, create a 24-hour flash sale, where people can buy your course, a special e-book, or a bundle at certain prices.
If you’re willing to invest more time, you can create a special product that people can only get during this flash sale that won’t be available again. This will also give the sense of urgency and exclusivity people tend to respond to very well.
8. Offer bonuses if the purchase reaches a certain threshold
You have probably seen this strategy used in many beauty stores, where they entice customers to spend more money by getting a gift bag or freebies if they pass a certain threshold.
This is a very effective way to increase the average order value because it adds extra value to consumers. It can also be a great way to introduce customers to new products or give them a chance to try something they wouldn’t have otherwise.
If a customer buys an online course from you for $250, offer them a bonus e-book or a PDF that complements their current purchase well and adds value. This bonus incentive can only be earned with a higher priced purchased.
Maybe you have an e-book that’s not selling very well. Or maybe you want to test the waters with a new online course, but before you do, you want to give people a taste in the form of a PDF and see how they respond.
Offering this material as an added bonus to a higher priced product can be a valuable testing toll and way to increase the value of your offer at the same time.
9. Offer a higher-priced payment plan
Another effective strategy to increase the average order value that many online course creators utilize is to offer payment plans for their courses. More specifically, higher-priced payment plans.
It’s a great way to encourage sales. Think of it this way: Payment plans don’t look as intimidating as a full-price online course that can range from anywhere from a few hundred to a few thousand dollars. And, because you’re giving the option to pay in parts, it’s a norm to charge more for the course.
Many customers might not have the means to pay upfront, so payment plans are a great alternative for those customers. Offering higher-price for said payment plans will increase your average order value because people will end up paying more in parts than they would if they bought the course at full price.