Get a free demo

Discover Your Growth Strategy

See Segmentify in Action

Shortly after you submit the form, one of our team will contact you to organise a time for your demo. Thank you!

Increase AOV With Personalized Product Recommendations

In ecommerce, driving revenue is often considered the culmination of strategic efforts to boost traffic. However, businesses can increase their profits by looking at their existing customer base.
The key is to increase their average order value (AOV). This metric is the average value of your online sales, which can be calculated by dividing the product revenue by the number of transactions.
AOV is sometimes overlooked but there should be no doubts about it – it is one of the most important metrics your ecommerce store should be tracking.

Why is Average Order Value Important?

AOV is a key performance indicator (KPI), similar to conversion rate. By setting targets to improve AOV, your business can encourage people to spend more every time they purchase from your ecommerce store.
Although it does not directly influence profit margins, AOV is an important metric because it provides insights on trends and buying patterns. This drives decision-making on advertising practices, store design and pricing as marketers strive to better serve their customers. In turn, efforts to improve the customer experience will boost the ROI for each customer.

How to Increase AOV With Personalized Product Recommendations

Advertising is not the most powerful channel for new opportunity –– your website is. Research by Big Commerce indicates that an increased focus on your existing customer base has the potential to drive AOV by 50%.
Put simply, you must get to know your customers better. You must discover what they really want. Most importantly, you must figure out how to give it to them.
Enter personalized product recommendations.
As far as ecommerce personalization goes, product recommendations are one of the most powerful tools online marketers can use today as they can deliver more than five times the ROI on marketing spending.
Product recommendations offer a 1-to-1 shopping experience that is tailored to the customer’s interests, eliminating their frustrations at being inundated with irrelevant content and products. This approach boosts customer satisfaction, which builds loyalty. As a result, customers tend to spend more, which increases the average order value.
To succeed with this method of ecommerce personalization, your business must utilize a strong foundation of data.

Data Insights Will Improve Your Ecommerce Personalization

Data is always reliable. Strictly speaking, clean data free of inaccuracies and corruption is always reliable.
In any case, manually tracking, adjusting and tweaking the data you get on every customer would be a gargantuan mission at best, and a logistical nightmare at worst.
Fortunately, with a recommendation engine like Segmentify on your side, it is easy to use the data insights to see what engages people. By tracking engagement data, ecommerce stores can recognize and react to the online behaviors of their visitors.
Going deeper, companies must look at the affinities people display during site visits, and also consider the reasoning behind the actions. Knowing the why behind the actions gives marketers a lot of power in driving conversions, and increasing AOV in the process.
To discover that, ecommerce sites should consider several key aspects in their stores, using the data insights to react with personalized product recommendations:

  • Search Queries – Offer personalized product recommendations based on the customer’s search terms.
  • Purchase History – Make product recommendations to the customer related to their past purchases.
  • Shopping Cart – Make product recommendations based on what items the customer currently has in their cart or their wish list.
  • Social Behavior – Consider the ratings, number of shares and likes that products receive on social media platforms.
  • Geographic Location – Consider the customer’s location or climate and make suitable recommendations.
  • Customer Segments – Use data on customers from similar demographics, considering what products they bought and then offering them to new customers.  

Don’t Confuse the Customer

One huge caveat of shopping in the digital age that everyone can relate to, is just how many options and alternatives we have to choose from.
This causes a paradox of choice, causing people to feel overwhelmed and distracted, which ultimately turns them away. An experiment on this theory set up free sample tables, offering customers 6 or 24 flavors of jam to sample. The table with six flavors was ten times as successful, with 30% of customers making a purchase compared to just 3% on the table with 24.
To successfully employ ecommerce personalization, it is crucial that you give your customers options, but make sure you don’t make it complicated.

Timing is Key for Successful Personalization

Businesses should keep in mind that each type of campaign will work differently on different pages. For example, smart offers are most effective at driving average order value when they are used on the homepage. As 97 out of 100 visitors will leave if they are greeted by an unrelated product, it is crucial that you grab their interest from the very first visit.
By comparison, showing product recommendations just as the customer is going to checkout is a great way to upsell and increase your average order value. Segmentify offers a number of powerful algorithms geared for this purpose, such as the frequently bought together algorithm.
Successful ecommerce personalization boils down to making the right product recommendations to the right customers at the right time. By crafting a more personal shopping experience, you can encourage your customers to buy more on each visit.

Focus the Choice to Fill the Cart

As more than 70% of customers get frustrated with offers that don’t interest them, it is obvious that companies must do more to enhance the online shopping experience.
Putting greater focus on personalized product recommendations allows companies to truly wield the full potential of data insights and AI, segmenting their customers by behavior and interests and then offering them the value, solutions and messaging they want to receive.
Amazon have mastered this to great effect, attributing much of their success to ecommerce personalization. If you want to drive your profit margins up, perhaps you should focus less on advertising for new customers, and instead consider how you can truly serve the ones you already have.  

Marketing Know-How

Become a better marketer with Segmentify's weekly newsletter!

You may also like

How to Develop a Robust Customer Segmentation Strategy in 5 Steps

In today’s competitive eCommerce landscape, businesses must find ways to stand out from the crowd and keep customers coming back for more. One of the most effective strategies for achieving this is ...

28 March 2023
The Ultimate Guide to Google Shopping

Do you want to list your products and increase the visibility of your business? Google Shopping is a powerful tool to drive sales and conversions. Additionally, it allows businesses to reach potential...

23 March 2023
How to Optimise Customer Acquisition Cost in 9 Steps

You might be struggling with acquiring new customers. Or, you might be satisfied with the outcomes of your customer acquisition efforts, but still wonder why your customer lifetime value doesn’t mak...

21 March 2023
Travel Booking On-Site Search Tips & Best Practices

Let’s say you want to get out of the city for the weekend or go for an adventure in a faraway place for a couple of days. What is the first thing you do? Search for accommodations in your desired lo...

16 March 2023
Is There a Way for Brands to BeReal?

Everyone’s, especially Gen Z’s, new favourite photo-sharing social media app BeReal encourages its users to show who they truly are without filters and the need to stage, overthink, or edit images...

06 March 2023
Ultimate Guide to Email Marketing Segmentation

Ever since Ray Tomlinson sent the first email in 1971, email marketing has been a thing. Decades have passed; email marketing has evolved. People receive many emails daily, and most are not even ...

02 March 2023