Redstage Magento Blog

Ted.com is one of my favorite websites ever. The entire site is filled with some of the most interesting, captivating, thought provoking and mind blowing presentations from the world’s top geniuses and experts. I highly recommend clicking around Ted.com and learning something…

I recently watched this particular video called, “Are we in control of our own Decisions?” by Dan Ariely. Dan Ariely is a behavioral economist and wrote the book “Predictably Irrational” (Official Site). His TED Talk is brilliant and has a few ideas that we can use in our online marketing and on our e-commerce websites.

Watch the Video here:

Default Options

One of my favorite takeaways from this video was the idea that a majority of people will simply agree with or comply with the default option. This was evident in the studies that showed the countries with high and low rates of citizens willing to donate their organs. If the question was, “check here to opt in” the country had a low acceptance rate, and when the question was “check here to opt out” the acceptance rate was extremely high.

How can you use this in your marketing?

You can use it in an upsell process. You have to be VERY careful, and transparent when you’re doing it so customers don’t become alienated by your website or flood your customer service number with complaints. Don’t just add extra cost to the checkout, make sure it’s apparent to the customer that it’s happen. There are many marketers and checkout processes that do (usually in the domain registration space (GoDaddy is king), web hosting and info marketing).

Think about this. A product is in your inventory and listed on your site for $10. After the customer gets the product in their cart, and gets to the checkout there is an automatic upsell before the order confirmation. This upsell charges $X that might change the shipping or improve the actual the item in some way by adding a feature, it could be a warranty, insurance, or even an extra product (for example, if you sell glasses, upsell a cleaning and repair kit). If the upsell’s price is marginal (based on the price of the original item, probably adding around 10% – 20% to the order), and the upsell is included by default, you might expect a low rate of opt out based on the data shown by Ariely in the video.

The upsell should be very obvious though so the customer can easily choose to opt out. Just imagine all of your order values increasing by adding in a few upsell options in your checkout and making them the default choice.

Price Anchoring (forcing a Good Deal)

The other takeaway that I thought was excellent and applicable was the price anchoring technique that The Economist magazine uses to drastically increase the number of subscribers that would take a higher priced item. They offer a web only, print only and a web + print option. The Web Only option is $59, the print only is $125, and the web + print is $125. Look at the results that Dan Ariely got from polling students at MIT, with the print only and without the print only options.

The results when the print only deal was an option:

and the results without the print only option:

This is incredible! When people think they are getting a good deal, they are likely to take the good deal but when there are two distinct and different options, price usually wins. Try positioning your products, shipping options or upsells in a way that your customers are getting something for nothing or getting a great deal… A/B test and see what happens. Brainstorm how you can do it like The Economist Magazine did it.

Think about Amazon.com – they offer free “super saver” shipping on any orders over $25. I know that I’ve added an extra product or two into my cart just to get over the minimum price, usually sending it to over $30. I doubt I’m the only one… have you ever done the same thing? This increases the average order value for Amazon which improves their marketing ROI and average $/Visitor among other important stats.

Thanks for reading! Have any feedback or some other ideas from the video? Leave some comments below!

What is your Favorite Open Source E-Commerce System? Over the past few months, I’ve seen a few new systems emerge and they are rapidly gaining traction, building developer communities, and introducing new extensions, capabilities and features. Obviously, we’re big fans of Magento mainly because of the scalability, community and out-of-the-box feature set (as well as it’s current popularity).

As newer systems become more popular, we would like to hear your feedback as to which you like, or think can compete with Magento’s popularity and growth.

After you vote for your favorite system, leave a comment below letting us know why it’s your favorite. Was it a great experience with a client? Are you currently using the system to run an e-commerce business?

On the other hand, you might be a fan of a hosted solution like Shopify or Volusion, or a multi-channel solution like GSI or Websphere – we would be happy to hear about those as well! Leave your comments below!

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If you want more information about any of these systems, here are short descriptions links to their official sites.

Cube Cart
http://www.cubecart.com/
“CubeCart is an “out of the box” ecommerce shopping cart software solution which has been written to run on servers that have PHP & MySQL support. With CubeCart you can quickly setup a powerful online store which can be used to sell digital or tangible products to new and existing customers all over the world.”

Magento
http://www.magentocommerce.com
“Magento is a feature-rich eCommerce platform built on open-source technology that provides online merchants with unprecedented flexibility and control over the look, content and functionality of their eCommerce store. Magento’s intuitive administration interface features powerful marketing, search engine optimization and catalog-management tools to give merchants the power to create sites that are tailored to their unique business needs. Designed to be completely scalable and backed by Varien’s support network, Magento offers companies the ultimate eCommerce solution.”

Open Cart
http://www.opencart.com
“OpenCart is an open source PHP-based online shopping cart system. A robust e-commerce solution for Internet merchants with the ability to create their own online business and participate in e-commerce at a minimal cost.”

OSCommerce
http://www.oscommerce.com/
“osCommerce has attracted a large growing e-commerce community that consists of over 231,400 store owners and developers who support each other and extend osCommerce Online Merchant with add-ons being contributed on a daily basis. To date there are over 5,900 add-ons that are available for free to customize osCommerce Online Merchant online stores and to help increase sales.”

Prestashop
http://www.prestashop.com
“PrestaShop™ is a professional e-Commerce shopping cart software that you can download and use for free. The big advantage of open-source software: you’re never ‘locked’ to expensive commercial software. Our dedicated team and growing user community join forces to fix bugs and add new functionality at a rate proprietary software companies can rarely claim. Join the Open Source revolution!”

Spree E-Commerce
http://spreecommerce.com
“Spree capitalizes on the dynamic nature of the Ruby programming language to provide the most flexible commerce platform available. Spree has been designed from the ground up to be as open and extensible as possible. You no longer have to be frustrated with the limited set of choices provided by most platforms. Spree is maintained by an active team of developers who continue to refine the code based on lessons learned from the challenges of real world deployments”

UberCart
http://www.ubercart.org
“Ubercart is an exciting open source e-commerce package that fully integrates your online store with Drupal, the leading open source content management system. This is a killer combination for anyone looking to build a community around a product, sell access to premium content, offer paid file downloads, and much much more!”

Zen Cart
http://www.zen-cart.com
“Zen Cart™ truly is the art of e-commerce; free, user-friendly, open source shopping cart software. The ecommerce web site design program is being developed by a group of like-minded shop owners, programmers, designers, and consultants that think ecommerce web design could be and should be done differently.”

Magento, with its wide support for multiple payment gateways, makes it easier than ever to accept customer payments. There are a plethora of payment gateways out there, and today we’re going to show you just how easy it is to set up Authorize.net. Authorize.net acts as an intermediary between your Magento store and the vast payment processing networks.

The Process:

• Gather Account-Specific Authorize.net Data
• Enter this Data into Magento
• Enable the Payment Module

I. Gather Account-Specific Authorize.net Data

Once you have an account with Authorize.net, you’ll need to obtain values for these fields:

• API Login ID
• Transaction key
• Merchant’s Email (this you should already have)

To find these, follow these steps (source):

1. Log in to your Merchant Interface at https://account.authorize.net
2. Click Settings in the main left side menu.
3. Click API Login ID and Transaction Key.
4. Under Create New Transaction Key, enter your Secret Answer.
5. Click Submit.

II. Enter this Data into Magento

Log in to your Magento Admin Panel.  Then, using the horizontal navigation at the top, navigate to System > and click Configuration.  Once that page loads, look for and click on “Payment Methods”, found in the left-column under the “Sales” category.  When the page loads, expand the “Authorize.net” area in the main-column by clicking on it.

Add the relevant Authorize.net values from the previous step, and set the various settings to your liking (e.g. which credit cards to accept, whether or not to require CVV validation, etc.)

Authorize.net Settings

III. Enable the Payment Module

While still in the “Authorize.net” area of System > Configuration, change the “Enabled” dropdown (first setting) to “Yes“.

Enable the Authorize.net Payment Module

Finally, click the “Save Config” buton found at the top-right hand side of the screen.

This is an old video of Roy Ruben from Varien talking about his vision of open source eCommerce and Magento. It was shot almost 3 years ago and shows the motivations of the company behind the system.

I first saw this over at TechCrunch’s article about Magento’s Funding.

The best part of that article is the end where they mention, “The roadmap for the future is apparently paved with additional products, with a number of “Mobile Commerce, Saas offering and other products/services” coming later this year.”. We can’t wait to see where the investment money goes and hope that the rumors of a mobile commerce app is very exciting.

Do you think that the guys at Varien were successful in their vision over the past 3 years? Leave a comment below!

How would you like to spy on your website visitors? Would it be useful to see visitor behavior, detailed down to mouse movement? The answer is YES! The site is called Clicktale. I made a quick video about the system, and how to get the free version. There’s a link to the site below the first video. Also, there’s an overview video under that so you can see a bit more detail about Clicktale, and how powerful it is. Take a look and enjoy!

Here’s an overview video of Clicktale, take a look.