In today’s saturated FMCG market, getting new customers is a constant battle.
To achieve significant revenue growth, businesses should shift their focus from solely getting new customers to also enhancing Average Transaction Value (ATV).
By prioritizing strategies that encourage customers to spend more per transaction, your brand can unlock new revenue streams and increase profitability by increasing lifetime value and ROI, especially when cost per customer acquisition is high.
Focusing on strategies that get customers to spend more per transaction can open new revenue streams and boost profitability.
Plus, it’s an effective way to increase lifetime value and make the most of your investment, especially when customer acquisition costs are high
Average Transaction Value (ATV) is the average amount a customer spends per purchase.
It’s calculated by dividing total revenue by the number of transactions over a specific period.
A higher ATV shows customers are buying more per visit, boosting overall sales. This article dives into four effective tactics to increase ATV and boost overall profitability.
Tactic #1: Reward Your Shoppers Instant Prizes Upon Reaching a Minimum Purchase Amount
In psychology, there’s a concept called loss aversion, where people go to great lengths to avoid missing out.
By offering a reward at a minimum spend, you tap into this bias.
Shoppers won’t want to miss the perk—especially if they’re just a dollar or two away from reaching it!
- Give your shoppers a delightful experience with Smart Receipts for automated spending verification and instant rewards.
- Offer them exclusive savings, e.g., 20% discount on their next purchase. This encourages repeat sales and takes them one step closer to becoming a loyal customer.
- Reward them with one entry in a lucky draw. This is akin to joining the lottery but with a higher chance of winning!
- Gamify your Spend & Win promotions to make them addicted to your brand of shopping experience.
Tactic #2: Give Bigger Rewards for going beyond the Minimum Purchase Amount
How about those who go far beyond the minimum spend?
Make your rewards match their extra spend, especially for those who grab bundled or premium offers.
For a $25 minimum, give bonus rewards at $50+—and make it engaging with a mini game!
- Give them more points if you have a loyalty program in place.
- Give them bigger discounts for their next purchase.
- Give them more entries for a lucky draw.
- Give them a flat discount, e.g., a $5 discount for purchases of $50 and beyond.
Tactic #3: Using Upselling to Increase Average Transaction Value
Upselling is a powerful way to increase average transaction value by encouraging customers to buy higher-value items or added products that complement their initial choice.
For example, a customer buying a basic cereal can be encouraged to upgrade to a premium, organic version or add a matching granola pack.
When done right, upselling increases customer satisfaction, as shoppers feel they are getting more value, while brands benefit from a higher spend per transaction and improved profitability.
Tactic #4: Increase Average Transaction Value Through Product Bundling
Bundling boosts average transaction value by combining related products, such as a shampoo with a conditioner or a snack pack with a beverage and offering them at a discounted price.
This encourages customers to buy more than they originally intended, increasing their total spend.
Bundles create a sense of value by offering convenience and savings, making it an attractive choice for shoppers.
All in all, increasing ATV is a smart way to drive growth and boost revenue.
By using strategies like upselling, bundling, and personalized offers, brands can encourage customers to spend more per transaction.
Using customer data helps tailor these strategies to make offers more relevant, while loyalty programs can inspire repeat purchases, further raising ATV.
By combining these strategies, you’ll create deeper, more profitable customer relationships that drive sustainable growth and long-term success.
