Be Careful What You Ask For (When You Ask For Too Little)

Aug 29, 2017

 

If you want your customers to spend more on floral arrangements you have to offer them more expensive floral arrangements.

 

A retail florist recently asked about their sales stats. They had compiled data on their sales for a period in the hope of increasing sales overall, and they hoped that a review of this data would give them insight into how to make this happen.

They identified what they believed to be the problem right away. Their average order value was about $60. Over 90% of their orders were for less than $70. This was lower than they had expected, and certainly lower than they wanted. Raising the average order value seemed like a good starting pointing for increasing overall sales.

But they struggled with how... they already offered floral arrangements over $70, so why weren't people buying more of them?

It was a casual discussion and there was no way to know what the employees were offering to customers over the phone, so we took a quick look at one page of their website, where the selection looked like this:

 

 

 

We also confirmed that the products on this page roughly corresponded with what the employees tried to sell over the phone. Suddenly things clicked into place.

 

Increasing Average Order Value

The collected sales data showed an average order value of $60.37. If, instead of customers choosing at random, the florist sold one of everything on that page of their website the average order value would be... $57.68. The average value of the products offered on that page was almost identical to the average order shown in the sales data. The problem wasn't that customers weren't buying bigger, the problem is that customers were buying what they were offered.

Increasing the average price, by featuring fewer items at the low end and more items at the high end can help increase average order value.

 

Increasing The High End

Meanwhile less than 10% of orders were over $70. Another look at the web page shows that, of the eleven products shown, just one was priced over $70. Again what people bought was closely related to what they were offered: About 9% of the products shown on that page were more than 70%, and about 9% of people spent more than $70.

Adding more products priced above $70 would help to increase sales at the higher end. Adding a single product at say $125 or $150, well above the current high of $99.95 would also help. Most people shy away from the most expensive option, and the solution is often as simple as offering a new even more expensive option.

 

Increasing The Middle

Most of the orders sold were in the $40.00 to $49.99 range. And, again, there is a correlation between what was offered and what was sold – there were more products in the $40.00 to $49.99 range shown on the web page than any other.

Featuring more products in the $50.00 to $59.99 range, maybe even the $60.00 to $69.99 range, would help shift the bulk of the orders up in value.

 



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