How to Drive Additional Revenue For EVERY Client:

What if you could take your current clientele and make 30-50% more, without having to drive new business? Getting new clients is always a nice thing. Sometimes, the only option is to work with those you have. We wanted to share how Average Order Value is a metric that you should be watching in your business and actively working to increase.

What is Average Order Value (AOV)?

Average Order Value allows us to understand a complicated part of our business in a really simple way. It is the average amount of money we make per appointment, over some period of time. Even though we sell “Services/Appointments” not “Products/Orders” it is still called AOV. Simple right? 

How to calculate your Average Order Value(AOV)?

In order to calculate your AOV you need to know these things:

How many services have you performed over the period of time?
How much revenue you have made over that same period of time?

We provided an example equation you can use to calculate your own AOV. For example: Let’s say over the last month you have had:
• 85 appointments.
• $4,700 (revenue).

 AOV Formula (revenue per service):

$4,700 (revenue) / 85 (# of appointments) = $55 Average Order Value (AOV) 

How understanding AOV changes your profit:

We understand school didn't spend a ton of time on this. That's why this article exists. Let's look at a situation where you were able to get half of your clients to increase their original service with $30 of extra service or a product.

Revenue after the Upsell: $70 (AOV) x 85 (# of appointments) = $5,950 (revenue) That's a 27% increase in revenue from the exact same customers!

WAYS TO INCREASE AOV

Now that we've looked at how this changes your profitability in such a big way, let's talk about the types of things that are often used to generate this revenue.

  • Retailing a product that you believe in is the #1 way that you can increase your AOV. Products like ingrown spot treatments (for treatment), ingrown serums (for prevention), body scrubs, body balms, and body lotions are all fantastic options for you to recommend to clients at the end of a service. Make sure that you trust their quality, because clients easily sense when you don't believe in your products. Educate them on how they work and when to use them. Check out Honeycomb's options here!
  • If a client comes in for a lip wax, it's an excellent opportunity to offer a chin, nose, ear, or eyebrow wax. Take your normal price and cut it in half or take 25% off for them upgrading while they are there. It means you don't have to find another client to make the income with.
  • Cross-sell by offering services that won't impact each other, but still offer a great opportunity to generate income and save the client time. One example would be offering a hydrating facial alongside the lip wax at a large discount as well. This may add 15-20 minutes to the service, but you will generate that extra $30 we are aiming for.
  • NOTE: We've had the opportunity to watch how going too high with your upsell significantly reduces your chance of the client accepting. Try and aim for the $30-$50 mark, depending on the demographic and service area.

These are just some quick options to add on to any service but can result in a larger bill at check out.

Increasing AOV through Bundling

Another opportunity to increase your average order value in your spa or studio is through bundling. Take your two most popular services and one of your most popular products, bundle them together, and give a discount.

There will often be opportunities as you are chatting with incoming clients to ask a question or two, then offer a related bundle. For example, offer a full leg, combined with a bikini, underarm, and an ingrown treatment.

The value of this may be $140, but it makes sense to offer all of them together at $99. Offer it and see if the client expresses interest. This makes sense because you have upsold the client from $45 for the full leg to all three for an additional $54.

Summary

We really hope this helps you dive into what your sales are and how you can easily increase your average order value. In summary, retail, upselling, and bundling are three different ways that you can leverage sales techniques within your spa or studio to drive additional revenue on every service! If you are looking for some products to retail check out some of our top-selling retail products.