What are the best strategies for increasing Average Order Value for repeat customers?

Jason Anderson made a great point on the Up Arrow Podcast that I keep thinking about. He said that brands often make a mistake when trying to increase AOV by setting loyalty or discount tiers just above their overall average order value. The problem is, your overall AOV is skewed by your best customers, while a first-time buyer's order is almost always smaller. Pushing them to spend, say, $20 more right away can be a turn-off.

His whole frame is less about squeezing every dollar out of a single transaction and more about intentionally guiding customers on a journey. He argues that the real goal should be getting a customer to make their third purchase. He sees that as the statistical tipping point where they become a loyal fan who is more likely to shop again than not. This reframes the AOV strategy for repeat customers away from immediate upsells and toward long-term Customer Lifetime Value Optimization. It becomes less about 'how do I make this basket bigger?' and more about 'how do I make sure this person comes back a second and third time?'

Cindy Marshall, speaking on the same show, really reinforced this idea. She urged brands to stop treating every customer the same and to focus on getting that second or third purchase. Increasing an existing customer’s order frequency and value is where the exponential growth comes from. If you can get a two-time buyer to become a three-time buyer, you've just unlocked a huge amount of value, and that's where you should be focusing your energy.

So what does this look like in practice? It means your strategy has to be segmented. For a first-time buyer, the 'upsell' might be a gentle nudge. Kunle Campbell on the 2X eCommerce Podcast talks about tiered offers, like 15% off a $100 order and 25% off a $200 order. Applying Jason Anderson's logic, you'd want that first tier to be just slightly above the first-order AOV, not your overall AOV, making it an achievable stretch. This could also be a gift card for a future purchase, which Jay Myers mentioned on Shopify1Percent as a great way to encourage that critical repeat order.

For your truly loyal customers, the ones on their third, fourth, or tenth order, you can be more direct with your Upselling and Cross-Selling. But it's also where you can build loyalty in ways that aren't just about discounts. I heard Tyler Delarm on an episode of the 2X eCommerce Podcast suggest creating a personalized unboxing experience that changes with each order. Imagine a customer getting something unique on their third purchase versus their first. That kind of attention makes people feel seen and valued, making them more likely to stick around and spend more over the long run without you even having to ask.