Photo Credit: Osborneb
It’s not everyday that you get tips on messaging and marketing from a Nobel Laureate. But that is exactly what Nobel Prize Winner in Economics Daniel Kahneman does in his recent bestseller Thinking Fast and Slow. Much of his book centres on the two Systems in our brain – The first system, simply called System 1, intuitively processes information and is quick to make decisions (think driving a car), while the second system, System 2, makes deliberate and considered choices (think taking a math test).
Kahneman tells us that if you have a well thought out message that you want others to believe, it’s not just what the message is that matters, but how you say it. In general, if you engage the intuitive and automatic part of our brain (System 1), the message is more likely to be believed quickly. And the psychology lab experiments bear this out.
We’ve distilled the three best tips that Kahneman dishes out on writing persuasive messages based on the science, and summarized them into a mnemonic. So here it is, The ReferralCandy S.M.L. Rule for Persuasive Messaging.
Here at ReferralCandy we got to wondering how many ecommerce retailers there are in the USA and how much they make. Asking Google brought us some possible answers, but not how they were derived and why they might be the right ones. So we decided to look for numbers we could crunch ourselves to get a good guesstimate.
Overall, the Top 500 retailers have a 77% share of the $198 billion U.S. e-retailing market.
The Top 500 Guide also happens to list each retailer’s yearly sales revenue. We plotted a graph of those 500 retailers and their revenues to see if there was anything useful we could find. This is what we got:
Nice. That graph sure looked like it followed a power law. Could we figure out what the power law function was? After removing the top 10 retailers (since they were noisy) and asking Excel for a little help, we found a function with a pretty good fit:
We were getting close. Assuming that the power law held for retailers past the top 500, we now had a way of getting the rank of any online store. Say we wanted the rank of someone running a side business making $12,000 a year. With a bit of math, we would be able to get the magic number of… 90,501. Plugging in a few more numbers would give us the following table:
|Yearly sales of at least||Number of retailers|
Our power law formula also gave us a way of estimating the combined revenue of all the retailers making less than $1,000 a month (spoiler: around $1 billion). So if we only considered online stores making more than $12,000 in sales a year, that comes up to about 90,500 retailers with a combined revenue of $197 billion in the U.S. That’s more than the population of the Seychelles!
So there we have it. Stay tuned for more number-crunching adventures in future posts.
Image Credit: bfishadow
For most businesses eCommerce provides the opportunity for local merchants to reach customers outside of their trading area, across the globe. However in some cases the services offered require a local presence to fulfill, for example a hair salon, day spa, landscaper, or garden center. As one of those merchants you realistically can’t deliver on the transaction. In this article we will be looking at those situations and ways local merchants can get income from customers outside of their trading area. Read the rest of this entry »