Average Order Value (AOV) is retail’s key metric, telling you how much, on average, a customer spends each time they place an order. The average order value formula is dividing your total revenue by the number of orders over a given period.

You might wonder, Why should I care about that in particular? Well, because increasing your AOV is one of the most efficient ways to grow your revenue without needing to acquire more customers (which requires additional commitment and expense). In other words, you boost profitability without increasing your customer acquisition costs.

There are several proven ways to do this, including offering product bundles, cross-sells and upsells, minimum purchase incentives, and of course, the focus of this guide: tiered and volume-based discounts. These two pricing tactics not only nudge customers to buy more but also give them a sense of getting a better deal, which strengthens loyalty and increases the chances of repeat purchases. Therefore, why shouldn’t you care?

Let’s Define: What Is Average Order Value (AOV)?

Simply put, Average Order Value (AOV) is the average amount a customer spends per transaction. You can calculate it by dividing your total revenue by the number of orders. For example, if your store earned $10,000 from 200 orders, your AOV is $50.

Bear with us; understanding this number is crucial because it directly influences your total revenue—when customers spend more per order, your business earns more without needing to drive additional traffic.

A higher AOV also improves your marketing ROI, since you’re making more from each customer acquired. Over time, boosting AOV can lead to a higher customer lifetime value (LTV), making your marketing and retention efforts more cost-effective. Thus, AOV truly is all that.

What Affects the Average Order Value?

Numerous factors influence the question of how to increase the average order value of your store.

First, product pricing is a direct driver as higher-priced items naturally raise the average. But beyond price alone, smart tactics like cross-selling and upselling can encourage customers to add complementary or upgraded items to their cart.

Discounts and bundles also play an important role by increasing perceived value, motivating shoppers to spend more to get the deal.

Even the checkout experience has its influence on AOV, not just by reducing cart abandonment, but by supporting features like upsell prompts or threshold reminders (e.g., “You’re $10 away from 15% off”), that do their job only in a smooth, frictionless environment.

What Is a Good Average Order Value?

There’s no one-size-fits-all answer to what makes a good AOV; it varies by industry.

For example, B2B businesses typically see higher AOVs due to bulk or wholesale purchases, while B2C averages can range significantly depending on product type and customer base.

To make your AOV meaningful, compare it to industry benchmarks and consider your product margins, customer lifecycle, and marketing costs. A healthy AOV contributes to better revenue performance, higher marketing ROI, and a stronger lifetime value (LTV) from each customer.

How to Increase Average Order Value Strategically

Boosting AOV isn’t about tricking customers, but about offering more value in ways that make sense for both sides. Before we get to discounts, product bundling is a classic approach, where complementary items are grouped at a slight discount, encouraging bigger purchases.

• Cross-selling (suggesting related products) and upselling (recommending higher-end versions) are also highly effective when done right with context in mind, not pushily.
• Loyalty incentives, such as points or exclusive offers, give repeat customers a reason to add more to their cart. And setting minimum thresholds, like “Spend $75 and get a gift,” can prompt buyers to meet that target, especially if they’re already close.
  

Why Discounts Work to Increase Average Order Value

Strategic discounts tap into basic consumer psychology. It’s always about showing someone what they get—when shoppers believe they’re getting more for their money, whether it’s a limited-time deal or a bundled offer, they’re more likely to increase their spend.

These offers create a sense of urgency i a fear of missing out, which can drive quicker decisions and larger orders. Even small discounts can feel like a big win if the perceived value is high, making the customer feel like they’ve made a smart purchase.

Understanding Tiered and Volume-Based Discount Strategies

To tap into consumer psychology using discounts, one must first thoroughly understand the discounts themselves and their importance in ecommerce. It’s safe to say they’re becoming the consumer’s expectation, as in 2025, nearly 70% cart abandonments happen due to high discount expectations. Let’s get into these two types known for boosting AOV

What Is the Tiered Pricing Method?

Tiered pricing is a discount strategy where the discount increases as the customer meets specific spending or quantity thresholds. Unlike flat discounts (e.g., “10% off everything”), tiered pricing motivates customers to spend more by offering progressively better deals at each level. This approach is ideal for encouraging larger purchases without discounting unnecessarily.

How Does Tiered Pricing Work in eCommerce?

There are two common forms of tiered pricing in online retail. The first is cart-based tiers, where customers unlock bigger discounts based on how much they spend.

For example:

• Spend $50, save 10%
  
• Spend $100, save 15%
  
• Spend $150, save 20%

The second is product quantity-based tiered pricing, where the discount is applied only to the units that fall within a specific tier.

For example:

• Buy 1–4 units: no discount
  
• Buy 5–9 units: save 10% (on units 5–9)
  
• Buy 10+ units: save 20% (on units 10 and above)

This means that if a customer buys 10 units, only the units in the 10+ range get the highest discount, not the entire order. This method is often used for individual products and allows for more flexible pricing structures, especially in B2B settings.

What Is a Volume-Based Discount?

Volume-based discounts apply a flat discount to all units once a purchase reaches a certain quantity threshold. The more the customer buys, the lower the price per unit, and that lower price is applied across the entire quantity.

For example:

• Buy 1–4 units: $10 each
  
• Buy 5–9 units: $9 each
  
• Buy 10+ units: $8 each
  
• Buying 10 units? All 10 are priced at $8.

This model is especially common in wholesale and B2B environments, where bulk purchasing is the norm and pricing simplicity is key.

Simply put, volume-based pricing applies a flat price across all units, while product tiered pricing can apply different discounts to each tier within the same purchase.

Tier Pricing Strategy vs. Volume Pricing Strategy

While both aim to increase order size, the key difference lies in how the discount is calculated. Tiered pricing typically targets cart value or spending thresholds, whereas volume pricing focuses on product quantity. Tiered strategies appeal to individual buyers looking for added value, while volume discounts are better suited for bulk or repeat buyers.

In some cases, hybrid strategies make the most sense—offering volume discounts on individual products while also using cart-level tiers to boost overall order size. This combination allows you to target different buyer motivations simultaneously.

Choosing the Right Price Breaks

When setting up tiered discounts, the key is to define price breaks that are both enticing to the customer and profitable for your business. Start by analyzing your current AOV and identifying logical thresholds just above that point to encourage upselling.

For example, if your AOV is $45, offering a discount at $50 nudges customers to add another item to their cart. Make sure each tier increment feels achievable while still improving your bottom line.

Psychological Triggers: “You’re $10 Away from 15% Off!”

A tiered pricing method works best when paired with real-time prompts that guide customers toward the next discount level. This taps into the fear of missing out and creates a gamified shopping experience.

Messaging like “Only $10 more to save 15%!” can significantly improve conversion rates and AOV, especially when displayed dynamically during checkout or cart review. It’s a subtle but powerful psychological nudge.

Avoiding Margin Erosion

While discounts can drive higher order values, it’s crucial to protect your profit margins. Run the numbers on each tier to ensure the additional revenue justifies the discount. You can also limit eligibility to specific product categories or exclude low-margin items altogether. Smart configuration ensures you’re not giving away more than you’re gaining.

How to Implement Tiered and Volume Discounts: Promotion Engine Configuration Tips

Implementing tiered and volume-based discounts starts with the right setup in your promotion engine. Most major eCommerce platforms like Shopify and Magento offer built-in tools or apps to configure advanced discount logic. For example, you can create rules like “Spend $75, get 10% off” or “Buy 5+, save 15%” and apply them based on cart total or product quantity.

With Qerdos, these discounts can be created as rules with conditions and tested in the sandbox before going live, ensuring a smooth rollout without breaking existing promotions.

Using Dynamic Messaging and Progress Bars

Once your discounts are live, how you communicate them matters. Adding dynamic cart messages such as “You’re just $12 away from unlocking 20% off!” helps motivate customers to add more items.

Progress bars on cart or checkout pages serve the same purpose of providing visual motivation to reach the next discount tier. These nudges are proven to increase both AOV and checkout completion rates.

Testing and Optimizing Your Discount Strategy

To ensure your strategy is actually boosting profits (not just giving away discounts), run A/B tests with different thresholds or percentage values.

For instance, compare the performance of “Spend $50, Save 10%” vs. “Spend $75, Save 15%.”

Monitor changes in AOV, conversion rate, and profit per order to strike the right balance. Over time, refining your thresholds based on customer behavior and margin impact will help you maximize the effectiveness of your promotions.

Customer Segmentation for Smarter Discounting

You don’t need to treat all customers the same when it comes to promotions. Segmenting your audience allows you to offer discounts more strategically, rewarding high-value shoppers without giving away margin unnecessarily.

Segmenting by Purchase History and Frequency

Start by looking at how often and how much different customers spend. VIPs who order frequently and spend more can be offered exclusive tiered discounts to reinforce loyalty.

For first-time buyers, a simple volume-based deal (“Buy 2, Get 1 Free”) might be enough to increase AOV and encourage a return visit.

Meanwhile, repeat but lower-spending customers might be encouraged toward higher tiers with a ‘spend more to save more’ structure.

Personalized Tiered Offers Based on Customer Data

With tools like Klaviyo, GA4, or a Customer Data Platform (CDP), you can go a step further, building automated campaigns that show personalized tiered offers based on real behavior.

For example, if someone consistently buys small quantities, you could prompt them with a quantity-based discount to buy more units per order.

If someone’s past purchase was $90, you could show them a dynamic offer to hit $100 for a discount next time. This personalization increases the chance that the offer actually drives higher order values, instead of being ignored.

How to Measure the Success of Your AOV Strategy

There’s no effective strategy without keeping track. To know whether your tiered or volume-based discount strategy is truly working, you need to track the right metrics.

Start by comparing average order value before and after launching a campaign, but don’t stop there; watch how it affects your conversion rate, gross margin, and overall profit per order. It’s possible to raise AOV but hurt margins, so balance is key.

Use tools like Google Analytics, Shopify Reports, or third-party platforms like Peel and Triple Whale to get a full view of performance and make data-backed decisions.

Final Thoughts: Building a Sustainable AOV Growth Plan

Boosting your average order value isn’t just about throwing discounts at the problem, but about balancing short-term incentives like tiered and volume-based discounts with a long-term strategy focused on product assortment, customer experience, and retention.

Keep testing different tiers, messaging styles, and timing to find what truly moves the needle.

But remember, AOV is only one piece of the puzzle. Combine it with smart segmentation, repeat purchase strategies, and lifetime value growth for sustainable success.

With Qerdos, you get the tools to implement, test, and track all of this in one place, so your AOV strategy doesn’t just work; it scales.