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How Intuit Makes a Social Network Pay

By limiting its online community to diehard users, the software maker has marshaled a volunteer army of expert customer service reps

It's hard to get tangible results from social media. Giants from Coca-Cola (KO) to Wal-Mart Stores (WMT) have set up Web sites where customers can share their interest in the brand. But many of these sites don't attract enough visitors to form a real community or have been slammed by critics, as was the case at The retailer killed it in 2006 after just three months.

Unlike many other companies, however, Intuit (INTU) seems to have figured out a way to benefit from social media. Its insight: Rather than inviting the whole world, the accounting software maker funnels only diehard users of QuickBooks to a site where they can exchange truly helpful information. For customers, that means quicker answers to problems. For the company, this volunteer army means less need for paid technicians. "What Intuit is doing is cutting-edge," says Mikolaj J. Piskorski, a strategy professor at Harvard Business School.

Intuit's QuickBooks Live Community is accessible automatically to anyone who opens QuickBooks 2009 on a PC or Mac. The site is similar to or—independent forums where Apple (AAPL) fans can trade tips—except that it's owned and monitored by the company.

Intuit chose this "narrowcast" approach after Chief Executive Brad Smith heard what was going on at the Web site of Intuit's popular TurboTax product. Customers were not only asking technical questions, they were often outshining Intuit's own tech support staff by answering 40% of the queries themselves.

Since the latest edition of QuickBooks went on sale last October, traffic on its channel has tripled. At any time, 70% of customer service questions are answered by other QuickBooks owners, says Scott K. Wilder, who oversees the social network. Michelle L. Long of Lee's Summit, Mo., is often on the site. The 45-year-old accountant has posted more than 5,600 answers.

The social aspect of the program seems to have helped sales. The Mountain View (Calif.) company has sold 1 million units of QuickBooks at $200 apiece, boosting the software's market share by 4 points, to 94%.

All that free tech support is saving Intuit money as well. In early June the company said it is laying off 4% of its 8,000 employees. Executives say the job cuts didn't stem directly from Live Community's success, but Wilder points out that since Intuit's community outreach began, "the number of calls to our customer service lines has been reduced. We don't give out numbers, but there have been cost savings."

Jana is the Innovation Dept. editor for BusinessWeek.

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