If you’re looking for a way to increase the revenue of your online course, start by looking at your average order value (AOV). Finding and acquiring new customers to increase sales can be expensive, but what if you could increase how much customers spend? How do you get customers to spend more?
Average order value is one of the most important metrics for online businesses to track. To increase revenue, you’ll need to learn how to increase the value of each transaction in your store.
Statistics show that most business revenue comes from returning or existing customers. It’s wise to capitalize on the attention you already have from your current customers.
In this post, we’ll define average order value, explain why it matters, and share nine easy ways to increase your average order value.
Table of contents
- What is average order value?
- How to calculate average order value
- Why average order value matters
- Nine easy ways to increase your average order value
What is average order value?
Average order value (or AOV) is the average amount of money a customer spends in your store in a single purchase. It’s commonly associated with e-commerce companies but can apply to any business—online courses and coaching included.
How to calculate average order value
You can easily calculate your AOV by taking the total revenue of any given period and dividing it by the total number of orders in that same period.
Here’s a simple formula: Average Order Value = Total Sales Revenue / Number of Orders
For example, let’s say your Teachable school generated $10,000 in revenue last September, split between 100 orders. Your average order value was $100. This means that, on average, each customer spent $100 per transaction. If a customer returns multiple times to place an order, each order is counted towards the AOV separately.
You can easily access sales revenue and order data in the Sales section of your Teachable admin page. Keep in mind this formula doesn’t calculate profit. To calculate profit, you’ll need to factor in marketing costs, product expenses, or other applicable operating costs.
Why average order value matters
There are multiple reasons why online retailers and creators should track and increase average order value.
First, AOV provides insights into customer behaviors and purchasing patterns. It also helps you evaluate the effectiveness of your marketing efforts and pricing structure. Last, AOV directly impacts your profits. Typically, higher average order values translate to higher profit margins.
Once you understand your AOV, you can find meaningful ways to increase it that benefit your customers and your bottom line. Here’s a closer look at the significance of average order value.
Understanding your customer better
Average order value helps you understand customer behaviors and motivations. Knowing how much each customer spends per order can help refine your pricing strategies.
For example, if you sell online yoga classes ranging from $15 to $75 with an average order value of $20, you know that most of your customers buy your cheaper course offers. In response, you may create additional lower-cost offers or develop a strategy to upsell more expensive, higher-value courses.
AOV also correlates with other important metrics like customer retention. The more you know about your customers, the easier it is to connect with them and retain their business.
Increasing returns on marketing costs
Increasing AOV can also help optimize returns on marketing costs like paid advertising or sponsorships. For example, if you’re running ads or paying influencers to promote your product, you’ll need to factor those costs into your profits.
The more you spend to get a new customer (aka customer acquisition cost), the more those costs impact your course profitability. By increasing your AOV, you can get more revenue out of each customer. As a result, you’ll see a better return on metrics like your customer acquisition costs.
Maximize your profits and increase sales
Profitability is key to running a successful online business long-term. When you increase your average order value, you’re automatically increasing the overall revenue of your business. Plus, when your profit is higher, you have more money to re-invest back into your business.
Increasing your average order value is the most efficient way to maximize your profits and increase sales. Instead of spending more on finding new customers, you can sell and earn more from customers who are already spending with you.
Nine easy ways to increase your AOV
There are many different strategies you can use to increase the average order value. Here are nine effective and easy ones to implement:
1. Offer discounts with a minimum spending limit
You’ve seen it before: Get 15% off if you buy two or more products. Offering discounts with a minimum purchase is a tried-and-true ecommerce strategy to increase the average order value.
For example, offer a 15% discount when a customer spends over $100 on your product or offer a discount when someone buys multiple courses or products. Make sure your deal is appealing enough for prospects to convert but not so low that you don’t make a profit.
Remember, you don’t want to rely on discounts alone. Discounts can devalue your products and make people less likely to act on an offer. If you offer 15% off every other week, people will notice it is always available and wait to purchase.
2. Create bundles
If you have digital products that complement each other, create a bundle. Bundling your courses is a great way to group multiple courses together and sell them at one price.
Course bundles are typically discounted from the combined price of the individual courses to encourage sales. For example, if you have two courses that sell for $30 each, you can bundle them together and sell them at a discounted price of $50.
With bundles, you can group similar products that might interest your customers in the future—making it easier for them to get everything they need in one purchase.
For example, suppose you offer a Photography 101 course. You can bundle this introductory course with your level two and three courses to give your customer the entire program at a discounted rate. By bundling all three courses, you’ve increased your order value and enhanced your customer’s learning experience.
3. Add an order bump offer
One of the best strategies to increase the average order value is to offer order bumps. An order bump is a sales technique in which you add another product at checkout to increase the order value. It’s typically a low-cost offer that complements what people are already buying and doesn’t require much consideration.
For example, if you sell online courses on financial management, you might offer a $10 monthly budget template to use with your Personal Finance 101 course. Commonly used order bumps for online courses include mini-courses, e-books, templates, and more.
On Teachable, you can easily add an order bump to any of your courses or coaching products. Under the Products tab, select the product you’d like to contain an order bump. In the left side menu, choose Order Bumps. Then, click the Create Order Bump button in the top right corner. In the pop-up window, you’ll enter all the order bump details. You can also look at this step-by-step guide on creating order bumps in Teachable.
4. Offer your time
As an online creator, your time is valuable. Students who buy your products are likely also interested in purchasing some of your time. Use this to your advantage and offer coaching or consultations to increase average order value.
If you’re selling an online course, offer multiple pricing tiers with complementary coaching packages.
- Lower tier – $300 for your online course
- Medium tier – $500 for your course and one coaching session
- Highest tier – $1,000 for your course and three months of 1:1 coaching
One-on-one or group coaching is a powerful companion to any online course. It allows you to dig deep into the course content and provide personalized guidance to your customers. Not only does coaching enhance the overall customer experience, but it’s also an excellent strategy for increasing your average order value.
With Teachable coaching, you can easily pair your online courses with coaching services. All paid Teachable members have access to our coaching feature. To create a coaching product, go to the Coaching page and click Create New Coaching. Once you’ve created a new coaching product, create a new bundle to pair it with an existing course offer.
5. Add memberships or community access
Not sure you can offer one-on-one support to every customer? There are other great ways to enhance your customer’s experience without giving away all your time. Many creators increase order value by offering memberships or access to private online communities.
You can offer a base price for the online course, where customers get full access to all material. Then, on the next pricing tier, you can include an invitation to your membership or community. Here, they can connect with other students taking your online course(s).
You won’t have to dedicate your time to coaching and private sessions, but you can still increase the value of your offer. And in turn, you can improve customer loyalty and retention.
Nicolas Botomisy offers an All Access Subscription to his online course platform. His membership includes a private group where students can connect and share their passion for 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, drastically increasing his average order value.
6. Create upsells with complementary products
Upsell offers are an excellent way to increase total sales and add value to your student’s learning experience.
An upsell is another sales strategy that many creators use to nudge customers to make another, typically complementary, purchase. While order bumps happen during checkout, upsell offers occur after completing the initial sale.
Teachable allows you to upsell your students in two places:
- On the post-purchase “Thank You” page
- Inside your course
You can add mini-courses, memberships, advanced courses, or other complementary products to either location. For example, if you’ve just sold someone a Photography Editing Course, you may want to present the customer with your Lighting Mini-Course immediately after checkout.
Be careful not to overuse this strategy. Make sure the upsell offer feels valuable and genuine. You want the customer to feel like a friend has hand-picked the product to pair perfectly with the item in their cart—like a server who suggests the perfect glass of wine to complement your meal.
7. Create time-gated offers
Another sales tactic that’ll allow you to increase your average order value is time-gated offers. Time-gated offers are promotions or discounts offered for a limited amount of time. This scarcity marketing strategy creates a sense of urgency, encouraging your customers to purchase before it’s too late.
No one wants to miss out on a deal. Urgency, plus an attractive deal, can motivate people to buy now and even buy more. There are several ways to implement a time-gated offer.
Here are a few examples:
- Run a 24-hour flash sale on every course in your store
- Create a limited-time offer during specific seasons (e.g., Black Friday)
- Offer a gift (e.g., a free ebook or templates) to the first ten customers
If you’re willing to invest more time, you can create a limited-edition product that people can only get during this flash sale that won’t be available again. However, just like discounts, use this tactic sparingly. If you’re frequently advertising “limited-time” deals, customers might assume another deal is right around the corner.
8. Offer bonuses if the purchase reaches a certain threshold
If you’ve ever shopped online, you’ve likely seen this strategy at work. Spend $50 or more, and you’ll receive free shipping on your order. Online retailers frequently use a free shipping threshold to increase order value.
You can easily apply this principle to your online course sales. Incentivize customers to spend more by offering bonus content to customers whose purchase reaches a certain threshold. For example, customers who spend $300 or more will receive a bonus ebook or PDF.
To calculate your threshold, use your average order value data. If your average order value is $50, consider offering a bonus or gift for orders over $75.
Incentivizing customers with bonus material is an effective way to drive up your average order value. It is also an easy way to add value to your core course offer and give customers a chance to try something new.
Display your bonus offer(s) on your sales page or Teachable homepage. Inside your Teachable Sales tab, you can create a segmented list of students who qualify for bonus material. Once created, you can quickly deliver bonuses to the segment of students straight from Teachable.
9. Offer a higher-priced payment plan
Many course creators utilize payment plans to increase order values and sales. By giving customers the option to pay less upfront, you’re more likely to convert customers on a budget.
Think of it this way: six payments of $99 are far less intimidating than a single $600 price tag. Payment plans are an excellent alternative for customers who might not have the means to pay the full price upfront. If you plan to offer higher-ticket courses, consider implementing this pricing option.
There are four pricing options on Teachable: Free, One-Time Purchases, Subscriptions, and Payment Plans. With Teachable payment plans, you can set a monthly payment amount to pay over any number of months (up to 36 months). Upon enrollment, customers will have full access to your product, only paying a set amount each month for the course. Learn more about how to price your products here.
Test, tweak, and repeat
There are several ways to increase your average order value. Once you’ve implemented one or more of the strategies above, you’ll want to test the effectiveness.
Start by implementing one strategy at a time. Once implemented, monitor your average order value data over several weeks or months. Determine whether your order bump or limited-time offer affected your AOV. If you don’t notice any significant changes, tweak your strategy. Perform A/B testing on different offer headlines, descriptions, or graphics. If an offer isn’t resonating with customers, try a new tactic.
Ultimately, your goal is to add more value to your existing customer experience while generating more revenue for your online course. The most cost-effective way to increase profits is by focusing on people already buying for you.