Why average order value matters
Increasing the number of customers is one way to grow revenue. Increasing how much each customer spends is another, and it is often easier and cheaper. A 20% increase in average order value has the same revenue impact as a 20% increase in customer count, without any additional acquisition cost.
For businesses working with commission agents, higher average order values also mean higher commissions per deal, which attracts and retains better agents.
Tactic 1: Bundle products or services
Combine related products or services into packages priced slightly below the sum of individual items. The customer perceives a deal, and you increase the transaction value.
A web design agency might bundle design, hosting, and maintenance into a single package. A supplement company might bundle three products into a "starter kit." A SaaS company might bundle additional features into a premium tier.
Bundles work because they simplify the buying decision. Instead of choosing between individual items, the customer chooses between packages that provide clear value at each level.
Tactic 2: Tiered pricing
Offer three tiers of your product or service: basic, standard, and premium. Price the standard tier as your target and make it the obvious best value by surrounding it with a limited basic option and a comprehensive premium option.
Most customers choose the middle option, which should be priced above your current average order value. The premium tier serves as an anchor that makes the standard option look reasonable by comparison.
Tactic 3: Upselling at point of sale
Train your agents to present relevant upgrades during the sales conversation. Not pushy add ons, but genuine improvements that enhance the customer's result.
"The standard package covers your basic needs, but based on what you have told me about your growth plans, the professional package includes [specific relevant feature] that will save you significant time as you scale."
The key is relevance. An upsell that genuinely helps the customer builds trust. One that feels like a cash grab damages the relationship.
Tactic 4: Minimum order thresholds
For product businesses, setting a minimum order value with a benefit attached can nudge transaction sizes upward. "Free shipping on orders over $150" encourages customers hovering around $100 to add more items to their cart.
The threshold should be set 20% to 30% above your current average order value. Too high and customers ignore it. Too low and it does not move the needle.
Tactic 5: Premium positioning
Some customers will always choose the best available option regardless of price. If you do not have a premium offering, you are leaving their money on the table.
Create a premium version of your product or service with genuinely enhanced features, faster delivery, dedicated support, or exclusive benefits. Price it at 2x to 3x your standard offering.
Even if only 10% of customers choose the premium option, the impact on average order value can be significant.
Tactic 6: Cross selling
After the primary purchase decision is made, recommend complementary products or services. "Most of our clients also add [complementary product] because it [specific benefit]. Would you like me to include that?"
Cross sells should be genuinely useful additions that enhance the value of the primary purchase, not unrelated products you are trying to clear from inventory.
Commission implications
When your agents increase average order value, they earn more per deal. This creates a natural alignment where the agent, the customer (who gets more value), and the business (which earns more revenue) all benefit.
Consider structuring agent commissions to specifically reward higher order values. A higher commission percentage on deals above a certain threshold incentivises agents to present premium options and bundles actively.
Measuring progress
Track average order value weekly. Set a target increase (10% to 20% is realistic for most businesses) and monitor progress. Break the data down by agent, product, and customer type to identify where the biggest opportunities lie.
Small improvements in average order value compound dramatically over time. A 15% increase sustained over 12 months can transform your business economics.