Now that we have identified your donation personas (Step 1), chosen your targeted first nonprofit (Step 2), established a relationship with your preferred nonprofit (Step 3), chosen the best donation options for testing (Step 4), and deployed our best practices to optimize conversion (Step 5)...
We are ready to walk through how to increase average order value (AOV) and customer lifetime value (LTV).
This is Step 6 in the process. If you haven’t completed the previous steps, please go back and walk through them. This process is simple, but it’s necessary to follow each step sequentially to optimize your results.
The ten key steps are as follows:
In Step 6 of this Master Class, we are going to teach you how to:
We are about to dive into some rather hardcore AOV and LTV strategies on improving your ecommerce sales by partnering with a nonprofit.
As a reminder: the higher your sales, the more money that is donated!
It always works out that way with these strategies.
So remember – while these strategies might seem a little overt, you are also optimizing to see a favorable sales increase.
So far, we have focused on optimizing conversion, which leads to an average conversion increase of 19%.
If you're following our best practices, you'll probably see a conversion increase north of 35%.
That being said, we've seen conversion increases of up to 54.7%.
That’s our record – see if you can beat it!
If you apply our best practices, you're going to get the conversion results that we talked about in Step 5.
Work the system – it works.
But now, we get to have some fun and play with a few different things to increase your average order value.
Before diving in, make sure you really understand your target personas.
Think about what matters most to them and how your actions can make a difference.
In the case of B2C customers, we all know that adding incremental upsells and value in shopping carts at the time of checkout has some positive impact on AOV.
One of the first steps we'll take is to make the most of this by offering incremental incentives related to the cause your customer cares about.
You can use incentives to entice them to increase their sale and donation amount.
Again, let’s not be bashful here.
Higher sales = higher donations.
It’s a win/win/win.
Before we discuss some methods, let's affirm the value of an AOV improvement.
As you know, your customers come to you through a variety of channels:
Each one of these channels has an associated cost, either original or effectively amortized since their acquisition.
Anything you can do to increase AOV will leverage your original or ongoing CAC and will increase LTV.
So, here’s the punchline: be prepared to invest an amount of money to enjoy incremental AOV sales, in the same way that you would invest incremental money in sales driven by paid search, social, or any other channel.
In short: treat AOV like a typical marketing channel.
It’s not just about the shopping cart – it’s about a long-term customer relationship.
Here's a list of some methods you can use to drive incremental increases in AOV tied to your cause marketing campaign.
This list of strategies is in priority of impact.
Incentivize the customer to increase their cart size and you will increase your matching or fixed donation amount.
As you know from Step 4, if you add, match, or give a percentage of sales to your customers' donation or purchase, it increases donations and cart conversion.
So, introduce tiers – just like some do for free shipping or discounts.
For example: if the customer’s cart is at $25, tell them you’ll donate $5 to the featured nonprofit if they spend over $50 – or that you’ll donate $10 if they spend over $100.
Remember – all incremental sales have a cost.
Compare the $5 or $10 donation increase to the cost of running paid search or the cost of another SMS marketing tool.
When you deepen the relationship with your customer, you increase their LTV.
Provide a discount on future orders or a current discount when customers spend a certain amount.
For example, "Spend $100 and we’ll donate $10 to our cause. Plus, get 10% off your next purchase."
Create product bundles where a portion of proceeds goes to a relevant cause.
Make sure these bundles are attractively priced compared to buying the items separately.
This not only adds value for your customers but also encourages larger purchases.
As the customer is making their way through checkout, upsell them to add this “Nonprofit-Designated Product Bundle” for a special discounted price.
Make sure to indicate that you will donate an incremental fixed amount to the nonprofit.
Allow customers to choose their donation amount at checkout with tiered options, possibly linking these to different discounts, rewards, or exclusive products.
Donating a higher amount could unlock a special discount or a unique product.
If you set a donation threshold that matches the percentage of sales being given to charity, revenue will increase.
Example: You are donating 5% of sales to your nonprofit partner. The customer’s cart is at $100, yielding a $5 donation. The additional offer can be: you will match donations over $8, which will earn the customer a 25% coupon on their next purchase.
Release special edition products that support a cause.
These are often perceived as more valuable or collector’s items, and can encourage larger purchases. Ensure these products are prominently featured and tied directly to the impact they have.
Recommend related products or higher-end items at checkout that align with the cause.
For example: if a customer buys a product that supports environmental initiatives, suggest adding a related eco-friendly product to their cart.
This doesn’t drive incremental donations per se, but it increases AOV.
Show how customer purchases contribute to the cause and the impact their donations have.
Use impact calculators, bar charts, graphs, or impact trackers that show the total dollar amount donated so far.
Display statistics on how customer spending positively impacts important causes. If customers see the tangible benefits of their contributions, they will be inspired to make larger orders.
Create or leverage a loyalty program where accrued points can be converted into monetary donations to a nonprofit.
This motivates customers to purchase more to maximize their rewards and in turn, their impact.
Share inspiring stories about the featured cause and how customer purchases help support it.
Emotional and compelling content can drive larger transactions if customers feel personally connected to the cause.
Showcase other customers' contributions and the collective impact of your ecommerce community.
Seeing others participate can motivate customers to increase their order size to feel part of the group effort.
Showing a picture of the customer donor of the month which matches your persona is an absolute killer conversion tool to increase conversions and AOV.
Implementing these 10 methods thoughtfully can help you not only increase your average order size but also strengthen your brand's reputation and customer loyalty by aligning with a cause your audience cares about.
As you might know, ecommerce stats are not very complicated.
Average revenue per customer (ARPC) is the average revenue per customer for a given period, usually measured as an annual amount or the average lifetime revenue of the customer.
Customer acquisition cost (CAC) is what it costs you to acquire a new customer.
Lifetime value (LTV) is ARPC minus CAC.
If ARPC is $75 and CAC is $25, your average customer LTV is $50.
Some companies break this down into incremental gross margin, but we prefer to focus on ARPC minus CAC for simplicity’s sake.
LTV should have two components: revenue and costs.
With that in mind, let’s look at opportunities to increase LTV by partnering with a nonprofit.
The methods below are ranked in order of impact.
Remember in Step 2 how we identified your persona and matched it to the nonprofit you want to partner with?
This is one of the most critical components of increasing LTV.
If we chose your nonprofit correctly, then the first thing we want to do is to set up a periodic email campaign to your current customers.
Email them about the new partnership, why you chose them, emphasize their cause, and offer customers a special deal or discount coupon for placing an order and donating to the nonprofit.
This will increase your LTV by increasing customer sales, reengaging dormant customers, and inspiring active customers to place more orders.
Just like in #1 above, if we chose your nonprofit correctly, then the nonprofit has a database chock-full of donors who match your customer personas.
This donor base will be energized by the opportunity to buy your products (especially if you offer special coupons!) that support a cause they are already aligned with.
Pro Tip: Hit it really hard the first time and offer the nonprofit’s donor base an incredible deal to lock in that first sale.
As you no doubt know, the first sale to a customer is the most important. Subsequent sales are easier because they already have an account, you know their order history, and they have the confidence of having purchased from you before. Returning customers buy 16% more and convert at a 74% higher rate.
If your typical new customer’s first-time sale CAC is $30, then commit to sacrificing at least $30 in value to try and get the nonprofit’s donors to be your new customers.
The LTV impact will be substantial.
If you have a loyalty program, allow your customers to donate their loyalty points to the nonprofit at a converted dollar value.
For example: if a customer spends $100 and earns 100 points, let them convert those points into a $5 donation to a nonprofit.
This incentivizes customers to purchase more – and more frequently – which then drives additional donations.
Pro Tip: provide a wide range of nonprofits that your customer can support. A critical piece of increasing LTV is making sure your customers feel genuinely connected to the cause. Giving them the freedom to choose helps build that connection.
Offer a membership program where members receive benefits like early access to new products, special discounts, or exclusive content.
Link part of the membership fee to donations, which can also boost the perceived value of joining and staying a member.
Example: “Join our donors circle for $20 and get 10% off on all orders in 2024.”1
Regularly update customers on how their contributions are making a difference.
Use newsletters, special reports, and social media to share stories and updates from the nonprofit.
Showing customers the real-world impact of their purchases can motivate continued support and purchases.
Pro Tip: Leverage impactful stories. No doubt your nonprofit has a story of impact with an individual. Ask them for someone who either matches your customer persona, or the child or grandchild of your customer persona, and then share that story with all of your customers. Email the story to your customers, let them see what their donations are doing, and that you care.
Birds of a feather…
Your customers hang out with people that look just like them.
So, what your customers care about – their friends care about, too.
Encourage customers to bring in friends by offering donation-based incentives for referrals.
For example: for every referred customer, a certain amount is donated to the nonprofit.
This is another way to add de facto persona-targeted customers who are likely to be repeat buyers.
This not only increases your customer base, but also multiplies the impact on the cause.
Run custom audience ads to your customer base on Meta, with specific banner ads touting your partnership with your partner nonprofit.
Offer a special incentive to customers who purchase, such as 20% off + a $5 donation.
Coordinate with your partner nonprofit to run a profile story about a person or cause that was helped by your partner nonprofit.
Run the story in conjunction with your nonprofit and include a link to a coupon if they donate at checkout.
Constantly pitching your customers about your products via email can undermine your brand.
Using a nonprofit relationship to intermittently bring your customers up-to-date on total donation amounts, coupons, and impactful milestones for the nonprofit creates a customer bond that is not solely about business.
Partnering with a nonprofit drives impactful economic outcomes for ecommerce businesses and nonprofits alike.
Conversion (discussed in Step 5) provides the quickest, most immediate impact.
But don’t leave money (sales) on the table.
Executing on a methodical, proven plan to increase AOV and LTV will double your sales impact over time.
Use Change to help you execute and prioritize your impact.
We will walk you through the entire process.
Just reach out and we can get you up and running.
We’ll set you up for success and create an economic win for you and your partner nonprofit.
When we do that, we know we have a customer for life. ☺
Now, let’s go on to Step 7 and discuss how to market the overall relationship.
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