We All Know What Happens When You Assume!

As a follow-up to yesterday’s post on ToolKing, I thought I’d share this Business Week article with you.  It’s a very interesting read on what not to assume when using social media.

Debunking Six Social Media Myths
Using social media to market your business is a good idea. Just don’t plan on getting your whiz-kid nephew to do it for free

The King of Tools Does it Right

I just found a few articles that I cut out of Internet Retailer  last month and reread them. Here are some interesting bits from ”Tool King hammers out more sales with more info and Web 2.0” in the February 2009 issue. (to read the full article go here)

“2007 was not a good year for Tool King – web sales dropped by 18.5%. So it brainstormed and decided that providing more information – much more information – along with adding Web 2.0 tools and entering the realm of social networking would capture more repeat customers and attract new ones looking to better understand tools and projects. The strategy worked. In 2008, web sales for Tool King grew by 10% to about $24.2 million from $22 million in 2007.

“We were placing too much emphasis on new customer acquisition,” says Donald Cohen. “Now ToolKing.com is focused on customer retention…”

It’s good to see yet another company focus on keeping customers. If only more companies realized that it’s more expensive to gain a new customer than it is to keep the old ones happy. That’s because the loyal customers tell others and that’s ultimately less marketing budget needed for the company to spend gaining a new customer. But at the same time, if you upset your customers, be aware that they may tell lots of other folks.

What’s the lesson in this? 1) Retaining happy customers is less expensive than gaining new ones 2) social media is a powerful tool!