The Single Most Important Measure for Your DTC Program
Average Order Volume, or AOV.
It sounds pretty obvious, but when you’re managing your winery’s DTC program, it’s potentially the single most important measure you want to keep your eye on.
If your customers’ AOV is up, that means they’re buying more and you’re in pretty good shape. If the AOV is stagnant or down, you’ve got some strategic work to do, especially around marketing and pricing.
"Consider AOV as your baseline, or introduction, for your analytics,” suggests Jessica Zander of Upper Left Craft Co. “If you have a good understanding of your average order value in relation to your average bottle cost, you can use this as a starting point for growing sales. Regularly analyze your AOV in each sales channel, then set small goals to increase that number over time."
For as obvious as it sounds, tracking AOV isn’t exactly simple. Here are a couple of nuances to keep in mind.
You’ll want to review AOV in the proper context and differentiate between channels, as Jessica suggests. Your AOV for your tasting room, for example, will likely be lower than your AOV on your website.
AOV can also be seasonal. Customers will likely buy more around the holidays, for example, and less in the summer.
Besides AOV it is also important to track your Average Customer Value, or ACV. Rather than just looking at the snapshot of an order, you’ll want to review the totality of a customer’s value over the past year.
We’ve worked hard to make it easy for you to track AOV, epecially in a 360 degree fashion, considering each of the nuances. We’ve also put together these five practical, hands-on suggestions for increasing your customers’ AOV that are built into the Enolytics’ dashboard.
Pricing. Increasing your pricing will increase your AOV but it needs to be done so that your customers won’t simply choose less expensive products. When you increase pricing, you’ll also want to track your return ratio, which is a functionality of our system.
Upsell and Cross Sell. Our Basket Analysis feature enables you to offer “Other customers also liked”-style of suggestions, in order to increase the value of each order.
Promotions. Incentivize customers with promotions that reflect their preferences and previous purchase history. Segment your customer database in order to identify target groups, which is easily done in our system.
Shipping. Consider establishing an order minimum for special (or free) shipping rates that is slightly higher than the customer AOV.
Bundles. Consider creating bundles of popular products at a discounted price, which will increase AOV.
How about you? Do you track AOV regularly, and what strategies have you used to keep it on the upward path? Please drop me a line. I’d be glad to hear.
Thank you!