Recently, a small three-person Shopify store with an average order value (AOV) of $28 tested out a new marketing strategy on their website.
Their goal: Increase the $28 average order value on their Shopify store.
The result: Doubled average order value from $28 to $55.60 in 24 hours.
How did they do it?
They followed this simple two-step discount tier strategy:
Discount Tier #1: Offer visitors 10% off any order over $45.
Discount Tier #2: Offer visitors 20% off any order over $90 (after the visitor has added >$45 of products to their cart).
Here’s what the 10% off offer looks like on their website. The blue notification bar at the top of the site tells people how much they need to spend to get the discount:
As visitors add items to their cart, the notification bar automatically updates to tell people how far away they are from getting the discount. This encourages people to increase their order size to get the discount.
Once a visitor adds over $45 worth of products to their cart, the notification bar updates to let them know the 10% off has been applied to their order. It then lets the visitor know how much more money they need to spend to get more savings (i.e., 20% off).
This strategy has been so successful for this small ecommerce company that they made $2,035.69 in the first 24 hours running it on their site.
Here’s a breakdown of how much sales each discount tier generated in the first 24 hours:
I can’t promise you’ll get the exact same results as this business if you execute this strategy. In fact, most businesses won’t double their AOV in 24 hours. However, one thing is for sure:
This strategy works.
To show you proof, here’s results from Elizabeth Mott (another Shopify store) who sells makeup:
Pre-July 30 this Shopify store was averaging a $19-$20 average order value. After 20 days using this strategy they hit a $44.56 average order value (see proof below).
They turned the strategy off for five days from August 15-19 to see what would happen, and their average order value dropped back down to $20. After turning it back on, on August 20, their average order value shot back up to $44 again in seven days (see proof above).
For more proof, here’s another example of how Boosted Stripes, a Shopify store selling shoes is using the exact same strategy:
Boosted Stripes use three different discount tiers to increase their average order value:
Discount Tier #1: 15% off any order over $25.
Discount Tier #2: 20% off any order over $40.
Discount Tier #3: 30% off any order over $60.
The result? They made over $1,000 in one week.
There are a few reasons why offering discounts to encourage people to spend more on your site works so well:
You turn buying your products into a game for your visitors. They need to browse your site and add products to their cart to unlock the discount. You’re making spending more money with your business fun!
You’re not “discounting” your brand by giving away discounts for nothing. You only discount for high-value purchases that are worth more to your business.
You take advantage of one of the 25 cognitive biases: commitment bias. As someone adds more products their cart and sees the notification bar update at the top of your site, they are more likely to add more products to their cart and complete the checkout.
If you want to try out this increase AOV strategy on your site, go into your Sumo Dashboard, click on "Shortcuts" and select the Sumo Increase Average Order Value Shortcut. It’s available on the Sumo Ecommerce and Growth plans and integrates with all Shopify stores.
If you aren't on the Sumo Ecommerce or Growth plan you can get a free trial of the Increase Average Order Value Shortcut by clicking the button below.
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P.S. You don’t need to use a blue or grey bar like the examples in this case study. When you set up this strategy on your site, you will be able to choose the best color to match your brand and website.