Social is Just the Beginning

You know how you keep hearing that social media is the future of marketing? And how social networks are changing the way people behave? There’s clearly something going on here, but it’s only the beginning.

Marketing is all about figuring out what influences purchasing decisions. And being able to tell who a person knows and talks to is central to this. You know why? Because for many thousands of years, we’ve relied on the wisdom of those around us when making choices. Modern social networks cleverly take these support systems and pin them up online. We’ve been given our first glimpse of how decisions are influenced on a global scale.

But not all friend requests are created equal. Your Facebook wall displays your college drinking buddy’s recommendation to try out that fabulous new ice beer. But it also (unfortunately) includes your weird uncle pestering you to sign up with his karate instructor. Your “friend list” goes a long way in identifying the people in your life who can sway the buying choices you make. But that list inevitably gets diluted.

What is it that actually matters here? The real value that’s hidden within a social network is the trust network. Who trusts this person and who does he or she trust. This is the holy grail. It’s who people trust rather than who they know that drives their shopping decisions.

But why is trust such a big deal when you’re about to make a purchase? Because every transaction is based on trust. It doesn’t matter if you’re buying your dream car or just dinner. You only want to do business with someone you trust will do as they promise. In a world filled with uncertainty and fraud, you need to find merchants who you can believe in.

And in this scheme of things, your trust network plays a crucial part in connecting you with the right merchants. The magic happens when someone you trust, tells you about who they trust. The recommendation works because trust can be transferred and our relationships serve to pass that trust along.

Networks of trust, and indeed social networks themselves, are as old as the first handshake. And as we take our relationships online, we’ll get better at telling them apart. That’s when things start to get interesting.

Which Shopping Cart Should I Use (Non-hosted)?

Which standalone shopping cart solution should I use for my online store? It’s a tough question to answer since there are so many solutions out there. Just so we’re on the same page, what I’m talking about here is self-hosted shopping cart software that you download and install on your own web server.

But the obsessive geek in me figured that there has to be some objective way of comparing them all. So I thought I’d dig around a little to see what insights I could uncover.

The first thing to find out was the quality of each solution, which should be linked to how popular it is. I measured this by running through the list of solutions with Alexa. I also ran the list through Google Trends to get a second opinion. And interestingly, the two sets of rankings were very similar.

Besides popularity, I also wanted to find out how much online interest there was in each solution. To do this, I looked to Delicious to see how many people bookmarked the solutions.

This legwork resulted in three tables. Each shows only the top 10 results in each area.

Alexa Rankings
Rank Solution Alexa Rank
1 Magento 991
2 OsCommerce 2962
3 Prestashop 3122
4 Zen Cart 3249
5 VirtueMart 3617
6 Open Cart 5704
7 Interspire 7694
8 CS-Cart 11159
9 X-Cart 11660
10 Dot Net Nuke 12755

Google Trends Rankings
Rank Solution Daily Hits (est)
1 Magento 108,000
2 Prestashop 50,000
3 OsCommerce 41,000
4 VirtueMart 34,000
5 Zen Cart 32,000
6 Dot Net Nuke 16,000
7 Open Cart 13,000
8 Interspire 12,000
9 CS-Cart 9,000
10 X-Cart 7,000

Delicious Rankings
Rank Solution Delicious
1 Magento 10254
2 Prestashop 3737
3 osCommerce 3413
4 Zen Cart 2580
5 Dot Net Nuke 2433
6 VirtueMart 1559
7 Open Cart 1423
8 X-Cart 533
9 Interspire 508
10 Mal’s Ecommerce 494

The three different approaches having surprisingly similar results, especially in the top few. So what can we learn from these rankings?

Magento is king of the custom carts - It is top, by far, according to all three sources. Enough said.

Prestashop and osCommerce comes next - These two solutions are consistently in the 2nd or 3rd positions in each area. Their results are close and I’d find it pretty hard to choose one over the other.

Google Trends has a nice graph to drive home the rankings.
Magento vs Prestashop vs OScommerce on Google Trends

So I now have my answer. If asked again, my reply will roughly be -

Magento Magento Magento. If that doesn’t meet your needs, the next in line are osCommerce and Prestashop.

There you have it. Recommendations based on some objective comparison between solutions, rather than your cousin’s husband’s colleague’s testimony. Of course this is just a quick and dirty analysis, but I think they’re good enough to serve as a starting point

Improving Email Open Rates

Since we’re running a bunch of referral marketing campaigns, we end up sending out quite a lot of email. A hefty enough number that we got around to wondering what was really happening to all these emails. Were any of them even getting read ? (Spoiler alert: yes they were!)

We decided to look at the stats for the last 1000 emails that were sent out by Ignite. Crunching the numbers, we found that 51.3% were opened and read. Hmm is that a good number? What are the industry averages for marketing emails anyway?

After a little digging we found this insightful post by everyone’s favorite email marketing monkey. Scanning through the open rates of the various industries in the Mailchimp article, we see a peak of about 36.6%. Of course Mailchimp has been around a lot longer than we have and so their stats are based on millions of emails. But it’s still interesting that ours is a significantly higher rate.

So what’s going on here? The increase is most likely because the emails we send out don’t really seem like marketing emails. Our referral campaign emails are sent out immediately after a sale is made at the merchant’s online store.

This means that the referral email is received by the customer along with the invoice right after the purchase. So the email feels a lot like a follow up to the invoice. And customers would be more receptive since the experience with the merchant is still fresh in their mind.

What does that mean if you’re trying to boost the open rates of your emails to customers? Aim to the send the email right after a customer interaction. This could be after he or she buys something or when you’ve just answered a support question. Hopefully this little tidbit will help you increase those open rates!

Referral and Affiliate Marketing – What’s the Difference?

“You guys do referral marketing? Isn’t that the one where affiliates do referrals for you?”

Turns out not too many people know the difference between referral and affiliate marketing. And if you think about it for a while, it is pretty easy to confuse one with the other. Affiliates do refer customers to your business… right? Although that’s true, referral and affiliate marketing are actually pretty different ways of finding new customers.

So it feels like it’s time for a stake in the ground. There’s tremendous value in reaching out to new customers through referrals. But that value can’t be unlocked without a clear and common understanding of what we’re trying to do. We hope this article serves as the place that helps us to align our conversations.

We’ll start with what’s the same between the two forms of marketing. Both drive new customers to your business through a group of people selling your product who don’t work for you directly (the advocates). This similarity is the reason that referral and affiliate marketing are often mistaken for one another. But there’s something very different between the two that sets them apart.

The answer lies in the relationship between the advocate and the prospective customer.

In affiliate marketing, the advocate doesn’t know the prospect personally. It’s unlikely that they would go out for a beer after work or know the names of each other’s kids. And this changes the motivation for the endorsement being made. The advocate helping you make the sale in affiliate marketing is doing it mainly for the financial reward involved.

Compare this with referral marketing which is carried out in a slightly different setting. Here, the advocate is recommending you to someone he or she knows quite well. This could be a college roommate or a co-worker during a coffee break.

But this relationship makes all the difference in the world.

The reason for the referral is now altruism and making referrals is a deeply satisfying way to connect with others. “I’ve found a great product or service that I want to tell my friends about because I believe that it will make their lives better.” Sure there might be a discount or other incentive thrown in to make sharing the message more attractive. But this doesn’t change why it’s being done. “I’m not going to wreck my reputation unless I think the recommendation will really help my friend.”

So there you have it. The core difference between referral and affiliate marketing is in the relationship between the two people talking about you.

The relationships in referral marketing are personal while the ones in affiliate marketing are financially driven.

This distinction leads to certain practical nuances that need to be considered when implementing the two forms of marketing. It also results in each having its own pros and cons. But we’ll save that for a future post. For now, we’re content that there’s a stake in the ground to start from.