How to Increase Your Farm’s Average Order Value
In 2009, Bartlett Farms began selling raw milk to their community, building the foundation for the Farm to become a staple for locals. Sticking to their values of providing high-quality, sustainable goods to their community has enabled the Farm to build a consistent customer base willing to pay a premium for their products.
Peter of Bartlett Farms has learned to increase his average order value (AOV) by communicating the health benefits of their products, pricing at a premium, and offering attractive fulfillment options (direct doorstep delivery). Now, the Farm maintains a profitable 6-figure business through its direct sales of milk and protein.
Listen to Peter’s podcast episode:
1. Communicate the Value of Your Farm Products
Why should Buyers choose to shop from your Farm versus choosing commodity products? To earn loyal customers, your Farm marketing must communicate the value of your products. Identify your ideal customer and speak to them, specifically positioning your product as a solution for what they desire.
Example: Peter Bartlett knows that many mothers want food that is non-GMO, chemical-free, and promotes the healthy growth of their children, rather than causing issues such as lactose intolerance. As the Farmer, Peter communicates the health benefits of raw milk regarding their growing children.
Buyers may be interested in products that can improve their health and well-being, while others may want to simply support local businesses. When your Farm offers a solution for Buyers seeking local products, they will shop at your store. Educate your Buyers via email, social media, newsletters, and in-person to build lasting relationships.
Your products are better than conventional alternatives, and the key to building loyalty is by marketing your Farm as an obvious choice for customers. Buyers want to know where their food comes from, how it is made, and how it will benefit them. Share these key details with Buyers, and they will appreciate the value of your products, making them “worth more” in their eyes.
Marketing starts with communicating the value of the product itself. You can invest in fancy packaging or pursue clever marketing tricks, but at the end of the day, the quality of your product is going to make more of a difference in how it sells.
- Farmer Peter
2. Price Your Farm Products at a Premium
Once Buyers understand the emotional appeal (value) of your products, you can then price them at a premium. Be sure to factor in your underlying costs in the price to maintain healthy margins. You will run out of business if you price low to compete with commodity alternatives. You cannot compare apples to oranges — your product is different from the commodity goods, just as raw milk is different from anything you can get at a grocery store.
Establish a Pricing Model: Incorporate your costs directly into your pricing model. Include delivery, packaging, and labor costs into the price to cover your bills, without making Buyers pay additional fees. If you tack on a $3 milk bottle deposit fee, Buyers will be turned off (lowering your conversion rate), versus just incorporating bottle replacement costs (at scale across all Buyers). There will be less money shuffling when everything is built into your core pricing model.
Provide Pricing Tiers: Offer different prices for each available bundle box or subscription. This will provide Buyers with options when purchasing, allowing them to choose a product package that fits their needs and budget. Bartlett Farms sells subscriptions in sizes ranging from a basic starter plan (small), a family plan (medium), to a large family plan.
3. Maintain a Simplified Inventory
Buyers will quickly become overwhelmed if presented with too many options in your Farm store (aka decision fatigue). To increase your average order value, assemble bundle boxes rather than offering everything à la carte. Buyers will be pleased to access more products through a convenient experience that streamlines decision-making and leads to a quicker checkout. This will drive more revenue for your Farm, increase your inventory turnover, and reduce your dependence on cold storage.
Consider the following when assembling bundle boxes:
Primary Cuts: When selling proteins, you want to move the whole animal to make a profit. Buyers may want special primary cuts (T-Bone, Filet), but you can entice them by only offering those mixed in a box with secondary cuts and ground beef. This eliminates the stress of maintaining too many individual items you would have to track, price, and sell.
Sizing Options: Offer bundle boxes that accommodate a variety of household sizes to reflect the ideal Buyers in your local community. For example, in a college town, you may not sell huge bundles to students. However, in suburban areas, large households are looking for 2-person or 4-person bundle boxes.
4. Lock In Recurring Revenue with Subscriptions
Subscriptions will secure more recurring cash flow for your Farm business and give Buyers peace of mind with consistent access to your products. 95% of what people consume is the same every week (proteins, produce, and dairy). Offer your community the convenient purchase options they desire to strengthen Buyer trust in your Farm products and encourage ongoing purchases (to become a regular staple).
Implement these effective strategies to increase your average order sizes:
Add-on Items: With Barn2Door, you can upsell one-time purchases and/or layer on additional subscriptions (e.g., flowers) to complement a base subscription purchase. Add-on items allow you to upsell individual items and add-on subscriptions, without the stress of processing and fulfilling 100+ personalized orders.
Farmer’s Choice: Over 90% of existing Buyers are likely to opt into purchasing your Farm-recommended bundle boxes. The most successful Farms will offer 3-5 core boxes with their essential, recommended items to lock in weekly, bi-weekly, and monthly Buyer commitments.
5. Building a One-Stop Shop For Your Community
Your products are unique to those at the “big box” grocer, so you must offer something of value that other producers cannot (such as your local Farm brand, health benefits, sustainably harvested products, and non-GMO status). Peter Bartlett listens to what those in his community desire when talking to them at markets, deliveries, or pick-up locations. He can identify market gaps that he can fill with valuable products for his community. This attracts new customers and pleases existing ones.
Example: Adding eggs and protein to the Bartlett Farms store increased the average order value of his bundles and sales because his Farm could become more of a one-stop shop for Buyers. Regardless of any new products you may add to your store, remain consistent in your brand and values, and actively listen to your customers (don’t fall for the ‘hype’ of a Farm bureau agent).
Conclusion
To successfully increase your average order value (AOV), you must consistently communicate the “why” behind your products to stand out against “big box store” alternatives. Ultimately, communicating the value of your sustainably raised, local products will increase emotional appeal and enable your Farm to charge a premium price. Once Buyers recognize that value, your Farm can build a trustworthy, local brand while maintaining a high average order value that supports a thriving, profitable business.
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