Average order value — how to increase it when you only have one product?Date : May 15, 2019 By
Once upon a time back in 2007 in Parallels we had a revenue problem. Well, we actually had it during all the time that I worked there even when our growth was much bigger than 100% in a year 😉 It depends on the type of executives that you report to, our CEO Serguei Beloussov was never satisfied with our results. He was probably right pushing the whole company to the limit. And this is where marketing creativity comes out. One of the examples was described in my previous entry «How to close the quarterly sales plan in just 3 days with digital tools?». And here is the next one.
So we were selling Parallels Desktop — a product for home users virtualizing Windows on Mac computers. What can you do with online revenue when you already optimized your acquisition, onboarding and upgrade process? One of the options to increase revenue was to work on the average order value. But we had only one product, so we didn’t really know what to do — until we have discovered in some statistical research available on the web that the average American home has more than one Mac device.
Well, so why don’t we offer 2 licenses in a bundle? Yes, we created it and called it «Family Pack». The merchandising was simple, when the user clicked on «Buy Now» button on the website, he saw the splash page with a simple call-to-action: «Have one more Mac at home? Buy 2 licenses for only $129,99 and save $49,99»! There were 2 options available: «Yes, buy 2 licenses now» and «No, proceed to regular checkout».
The results were unbelievable — daily sales increased by 30% without cannibalizing our normal license revenue. So the cost was enormously low, only 2 hours of developer work and some changes in our hosted billing system.
What was the main lesson for me? I assume the key to success is the right moment to merchandise the offer on the website (or in the app). If we would just place it on a separate page linking it with the product page, we wouldn’t get such a huge increase. The right moment is when the user already clicks the main action and we stop him just before the order checkout process with a simple splash page with only 2 buttons. In this case psychologically the user is more prepared to review the additional offers or upsells. This way the conversion is getting much better.