Having a membership alone can be tricky and at a low price point you need a lot of volume to be profitable.
So one of the ways to actually become profitable is to focus on increasing your ACV – your Average Cart Value.
When you don’t have the volume yet to hit your revenue goals, and you aren’t charging a high price for your offers, there are smaller ways to increase your ACV and come out ahead. Tune into this episode to find out what they are!
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Hello, my friends. And welcome back. We are second week in February. I wanna know. Do you guys get into TV shows? Do you, do you watch TV shows? What are you watching? I, uh, <laugh> I get into series and I get very upset when there’s not multiple seasons and I, I have to wait each week for the next episode. I’m a, I’m a binge watcher. I like to get into seasons, uh, series that have like four or five seasons. I’m like, yeah, yeah. I can watch this for a long, long time. Uh, my husband has been trying, had been, trying to get me into Yellowstone for a long time. And I was like, no, I am not watching that. That looks like some country. I don’t know, wild west thing. And oh, was I wrong? Such a good show. Oh my goodness. So, um, you know, we’ve got some really good seasons of series that are back out now.
One of my other favorites is billion. I love that show. And, uh, you know, they did a weird like half, they did like a long hiatus in between the last season and the season. So they brought back the end of whatever series season that was, and then they had a short hiatus and brought the rest of the season then pretty quickly. So they tried to make up for all the, you know, disappointed fans out there like me, which is good because I was like, no, why have you been gone for so long billions, such a good show. Um, and blacklist blacklist is back. There’s some good ones. What are you? Guys’s favorite shows? I get really into those. I don’t know. What are those dramas, uh, succession. That’s another really good one. Uh, okay. Let me not get onto a whole topic there of TV land, but I like to take my mind off of my work and my, and, and, you know, give it, give some <affirmative>.
I don’t know, I would say comic relief, but none of those are very funny shows, but I really like to get into the fiction of it and yeah. Anyway, fun for me at night on the couch relaxing. So we’re talking today about raising the average order value of your offers. So, and in particular, how to raise ways to raise the average order value. Now, before I get into how to do that, let’s talk about what an average order value is, or average cart value is an, is another word for it. So you’ll see the, uh, acronyms, AOV or ACV, so average card value. And all this really means is it’s how much money your customer spends on a single order. So even if they’re buying multiple things of yours, it, this is really about
The one order at a time. So if you have five purchases come through, you’re gonna take each order and divide it by five. And then that’s your average order value of those five people? Um, the thing that, the reason why I wanted to talk about this in particular, because I deal a lot with memberships and a lot of people’s memberships are low price points. So 27 37, 47, 67 90 $7 a month because they’re recurring charges. A lot of times, not always there can be high price memberships and high ticket, you know, coaching programs and all of that. But when you have a, a low ticket membership, the trick is that having that low price point, you’re gonna need a lot of volume in order to be profitable.
So li low price point easier sale because it’s, you know, cheaper, but it does require more volume in order to you make the difference on your bottom line. So your average order order value or card value is easy to define. It’s simply how much money a customer spends on an average, uh, on average, on a single order. So it’s a type of metric that we use in online business. And it’s very important that you’re tracking this and we’ll talk about why. So, so now you know how to track your AOV or ACV. We’ll talk about why it’s important. So two main reasons. One is that it gives you a concrete idea of how much you can spend on advertising. So once you know, your, uh, average order value, you can then subtract other costs that you have, like your other fees or your other expenses. And you know that what you have left is what you can spend in order to advertise your membership without losing money.
The second reason is to know how effective other things that you’re adding onto your main offer are. So the other things that you’re gonna add onto your main offer, we’re gonna talk about order bumps up cells and down cells. So if you, your AOV or your ACV is a little bit too low, so that you’re not actually making a profit. When you take off your expenses, your ads, all of that, then we need to improve those other bonuses or other alternative offers that we have to your main offer. Or we may to raise the price of your main offer, or we may need to lower your expenses. So there’s different ways that we work this out in the scheme of things, but bottom line, we need to know what your average order value is in order to determine if it’s working and if it’s not, what do we do to improve on that?
So let’s talk about these things, order bumps, upsells, and down cells. So, um, let’s think about you have your main offer, which is your membership. And then when people go to buy, that is sort of like an order bump is sort of like a no brainer at the checkout line. Like you’re going there to buy a chicken, but then you’re at the, you know, cash counter handing your money over and you see, oh, they have like those little, uh, no brainer, things like the gum and the breath mins and the just lined up like the candies. You know, when you have kids, they always want all those things sitting right by handy there that you just grab and you throw on the belt with your chicken and you don’t even think twice about it, that’s an order bump. So that could be something that it is gonna be less than your main offer.
So let’s say your membership is $27 a month. An order bump is gonna be less than that. So it would be maybe a workbook or some like an ebook or something that you can just add on, but it’s gonna be a low price. So under it’s gonna be lower than your main offer. And it goes as one inside the, uh, purchase. So it’s basically like usually just a little tick box. So when they go to purchase it, it’s like, okay, thank you for purchasing. Would you like to, you know, it’s just like one line with a box add on, you know, workbook. And then all they have to do is take that box. That’s an order bump. So that’s one way that you can raise your average order value without much extra work. And it’s, it’s kind of funny because could you include that in your main order?
Yes. But then you are instead of $27 a month, you’re gonna have it be $37 a month, which is gonna be a higher price point. Whereas you could do $27 a month and have that order bump a $10 workbook. It’s gonna end up being the same, but psychologically it is, it’s different. It’s just silly. Like how we think it’s like, oh no, I’m paying 27, but oh yeah. I’ll throw in that $10 thing. And they don’t even think about it. So that’s an order bump. Now, after the purchase goes through you’ll land on a cue page, and you will know what I’m talking about as a customer, you will have done this, even if it was, uh, on Amazon or, you know, buying a physical product, you’re buying a tennis racket, right. And then you land on the thank you page. And it’s like, you know, while you’re buying this tennis racket consider, you know, would you like to also get this book and these tennis balls and these other things, it’s like the next thing that you would buy now that you have a tennis racket, right?
It’s an upsell from there. So with information products or services, or, you know, these digital informational products like memberships, we don’t wanna actually have the upsell be more of the same thing. So that’s where sometimes people get tripped up is they just offer another workshop. Like if the first offer is a workshop or training, the second offer, they’re like another workshop, another training you don’t wanna do that. You wanna make it different. So an upsell from your membership could be something exciting or different or, or, you know, it could be a private session is usually a great upsell, especially when you are, uh, first starting out and you have more time getting that. Uh, one on one attention for your new member is gonna really help them. And you, and guess what it raises that average order value right up. So, so let’s think about this.
So we’re, we are our person at the checkout line, but they’re online and they are choosing your 27th or 7 47, whatever your membership is, you’ve got the order bump, you’ve got the workbook, you know, throw that in no brainer. And then they come to the thank you pages. Like your order is almost complete would while, you know, limited while quantity is limited, you know, while time is, uh, before it runs out, would you like to add a private session with you? And whether you, you charge 200, 5, 4, 500, whatever you charge for your private session, you’re gonna say that there, this is, you know, the value of this session, but for the, you know, first 10 people, it’s gonna be X amount, you know, count. So you give it to them at a good rate off of your normal one-on-one session rate. They’re already in a buying mood and a buying mode.
And if you have the software, this can be automated where they don’t actually have to put in their credit card information again, which again, it sounds silly, but that is a barrier to buying something. Cuz they’re like, Ugh, I have to put my number in again. Well I have to already put my credit card away, but look, they’re already in a buying mode. So they’ve already started buying. They say, there’s a saying of something like, you know, a buyer in motion stays in motion. So it’s like they’re already buying. So give them something else to purchase. So it’s ends up being part of the same transaction. So although we’ve just talked about three different products, essentially this all gets rolled into one order. And so it will raise the average order value for you. So where you started out at 27, now we’ve got 37 with the workbook.
And then, and we’ve got a private session, which is normally 400 it’s, you know, 200 special offer. So now we are at $237 for that, uh, order where we would’ve just been at 27. Now, is everyone going to choose the order bump and the upsell? No, but what you’re going to do is you’re going to notice that one out of every 10 does or however many, and that’s going to on average, pull that, pull that number up. And the more you can pull that ACV that AOV up the better off you’re going to be with your membership sales, because then you can start to, uh, invest some money into advertising or into hiring a VA or into upgrading your, uh, payment systems to something like click funnels that has this sort of capability of adding on the order bumps and the upsells without you having to do a lot of work, like it’s all automated.
So that’s where you wanna kind of get to if you’re not already, but start with the, uh, conceptually start thinking about what could you add on to your main offer? And if it’s a membership, it’s sort of like, what can you add onto this main membership offer that would be of added benefit to your new member? Who’s in buying mode. That’s gonna help them to buy even more while they’re at it. Now, another option could, would be that you have your main membership and it’s like whatever amount per month and that’s your base level. And another option would be to add a second tier to that, like a V I P level. Now I say this with a word of caution because I see people try and get crazy fancy, and it just ends up being so complicated and then end up shooting themselves in the foot.
You do not need bronze, gold platinum sprinkled, you know, sugar coated icing on top purple. You know, don’t make it crazy. I think two levels is great. Three you’re pushing it. And any more than three, you’re just crazy. Just don’t even go there. Um, we always see that even with people having, you know, three options, you’re cutting your sales way back, cuz people just get confused and the confused mind does not buy. And what you’ll see is even if you do have three options, like really no one is choosing one of them. So if you have like bronze gold platinum, it’s like, no one’s choosing the bronze. No, one’s really choosing the platinum. They’re all choosing gold. So just cut those levels out. So when I say add a second tier, really I say it with a grain of salt and I mean like two max not go crazy with this idea, but a VI level can really be another way to add value and to increase your bottom line and not a lot of extra work for you and not a complication of your whole business model is just an added tier.
So super easy way to do this. Um, I have someone right now who I’m working with and he has a base, you know, level membership and he’s like, I wanna add a VIP. I’m like, okay, well what is it about, what are the VIP members going to get that’s unique or different? And so you wanna start with not the price or not the stuff you wanna start with the offer and what it is that you’re helping them achieve. Like why would someone be, why, why what’s in it for them? Why would they choose this V I P level? And for him, he is adding in a private session with him every month for his VIPs. So it’s not comfort. Okay. At all, to understand it’s easy, you can put it on the sales page. He just, you know, adds on this much. And it’s a better deal than if they were to just purchase a, a private session with him outside of the membership.
So people always wanna feel like they’re getting a good deal. Even if they’re spending $10,000, they wanna feel like they’re getting a good deal off of, you know, whatever this $10,000 thing they should feel like, oh, it, it normally costs 50. Um, so if it’s a hundred dollars membership, it should be a value $500 membership. They feel like they’re getting a deal. So if they’re go, if you’re gonna add a private session in as a V I P opion, it should be at a value that’s better than if they just went and got a private session from you one once in a blue moon, right? So you want it to be a good deal for you because you can count on that regular recurring, extra income and a good deal for them because they are not paying as much as they would if they just went and did a private session with you.
Hopefully that makes sense. So, number three, you could package your membership with something else that you’re already selling. Like if you do have another course or a workshop or an e-book or digital product, something else you could package it with. So that is sort of like, you know, a bundle deal. That’s another way to raise that average cart value. Um, it depends what your other offers are. If you don’t have other offers, I wouldn’t go create one in order to do this, but if you do, and they go nicely together and you’re like, you know, sort of again on Amazon where you’re like people who buy this also consider this and they show you different things. It’s like, you can do something like that where it’s like, Hey, while you’re considering this, you know, I also have this companion product that you might wanna get to go with it.
So that can be a really good thing, uh, to consider. And that would also be a benefit for people that don’t know that you have multiple offers. So they come in at one level in, or one area, one entry point, and you introduce them to another product or service that you have that they didn’t even know about bottom line when you don’t yet have the volume to hit your revenue goals. So meaning you don’t have a large database or social follow following, and you don’t have a huge membership and your membership price is on the lower side. You’re not gonna hit your financial goals because you don’t have the revenue. So you have to start looking at ways to raise that average order value. So that in as you’re growing your database, as you’re growing the size of your membership, you’re also growing your bottom line because each purchase is now offset.
It’s a little bit higher. And I recommend that you always set a, a portion of your, uh, profits to reinvest in your business. So whatever that looks like for you, whether it start starting to hire, help or invest in new systems, to make things easier for you in better softwares or in advertising, whatever that is, or maybe start an affiliate program, or there’s lots of different ways, but you’re in reinvesting that money. You’re not just going, Woohoo, have money, let me go buy something. It’s like, you know, when you’re starting a business, you’re starting this membership. You’re probably not going to make a ton of profit right off the bat. But if you’re smart about it and you reinvest a lot much as you can, you can grow very, very quickly. So there are smaller ways to raise your AB average car value, your average order value and, and start coming out ahead.
This is, uh, not something with a low ticket offer. That is really a way to make, you know, bank like overnight, but it’s a slow, steady growth type of strategy when you’re not charging high ticket. You’ll see slower progress that way, especially when you don’t have the volume, but it can be really good for lead generation. You know, you’re offering a small offer, uh, price point, which allow allows people to get onto your database to start experiencing your work with a low barrier of entry, which is really good. So they can come in with, it’s sort of like low risk. They don’t know you yet low barrier of entry, but they’re, they’re paying something so that they do have skin in the game. And it’s allowing you to have those ad costs offset, and those operating expenses offset by the amount that they are spending.
So don’t discount. The low ticket offers the low, uh, price point memberships, but do consider ways that you can always increase that average order value in creative, different ways. One thing it didn’t cover yet is actually a down sell as well. So we, we covered order bumps, which is that checkout counter gum that you just throw in. So like a, a workbook, something like that. That’s usually just a tick mark at the time that they’re purchasing your main offer. We talked about upsells, which is the thing that you get on the thank you page, where it’s like, you know, while you’re at it, here’s another thing you might enjoy. Um, by the way, the upsell is usually more expensive than the main offer. So if you’re starting with a $27 membership, your workbook is 10 or seven, and then your upsell would be like, uh, 47, 57 97, something greater than 27.
So down sell is something that, that you get to when you, when your customer has said no to the other offers. So it is not to complicate things. Again, we don’t want 27 different tiers and all crazy options, but once they have, you have introduced the offer to them, the main offer, and they have said no to that offer. And by saying, no, it could be, it could look like a, a few different things. So if you have an open cart period, it, and so like they’re able to buy it for a limited time, four days, five days, six days, seven days, whatever the cart closes and they no longer can buy it. And they still haven’t purchased that is them saying no. Okay. So now they’ve said no, uh, to that offer, what you can do is send out an email to those people who seemed interested, but didn’t buy and say, look, you, you weren’t maybe interested in this or it wasn’t the right time for you.
Might you be interested in this other thing instead? And so it’s an alternative offer to the one and it’s usually a lesser price point. So it’s a cheaper option than the first one. Now you probably wouldn’t wanna do that with something like 27, cuz you’re already so low, but I’ll give you an example from my own business, we have a core offer. That’s, you know, $2,000 and someone has to go through an application in, in order to determine if they’re a good fit for that, uh, offer that we have. And for us to see if we wanna work with them now, if they, or, or we together decide that that is not a good fit, they’ve said no, or we’ve said no. And it’s, you know, basically that offer is closed. We follow that up with an offer to my membership, which is 97 a month.
So it’s a down sell from that core offer, but we don’t lead with, Hey, we have three different offers. Are you here? Here? Or here? Like we don’t confuse people that way. They’re very different offers. So it’s an not just like, oh, you can get the same thing for way less. They’re not the same thing. But if someone isn’t ready for whatever reason, uh, that level of commitment or price, or, uh, they’re not at that point in their business. So it’s a no. Then we follow that up with a down sell. And we say, maybe this is more your speed at the moment. Maybe this is where you need to start. And we, uh, invite them to the membership. Now, once they’re in the membership, after a while, they may be ready for the core offer. So consider that as well as, uh, a possibility don’t, you know, discount people after they are gone and discount.
I mean, like don’t, don’t discard them. Don’t decide that they are gone forever. Sometimes they just need a little bit more time or the offer wasn’t quite right for them. So having an alternative that you offer them after they’ve said no to the one that would be a down sell. So that can be another option. So this was a little bit of a trickier, more complicated, uh, episode. You might need to go back and review again, but we covered today what average cart value, average order value, same thing is it’s important to know and what you can do if you do know, which is, uh, to be able to plan ahead with your budget, for your ads and your overall business expenses that you can actually afford once, you know what your average order values are. We talked about order bumps, upsell down sales. We talked about adding second tiers to your membership, like a V I P level.
We talked about packaging, your membership with other things and bottom line. These are all different creative ways to help you meet your revenue goals and help you to get to the targets that you’ve set for yourself and your business. Even you don’t have the huge following or database, which none of us start out with. We all start out with nobody on our list. So don’t forget that wherever you are is just perfect. You’re never behind. You’re not slow. You’re not, you know, uh, at a disadvantage, we all start there. And the more, most important thing is that you do get started and you do take action every single day to move yourself forward. Sometimes that action can be having a break, having a rest. Don’t forget to nurture yourself. I’m about to go and have a bath, I think, and it’s raining outside and it’s kind of one of those resting record pod rest and record podcast days. So thanks so much for joining me today and happy, happy day, happy night. I’ll see you next time. Bye for now.