If you need help with a glitchy Logitech mouse or webcam and you happen to stop by the company’s online support forum, you might notice a bunch of posts from a guy calling himself KachiWachi. Since 2006, when he started contributed to the forum, KachiWachi has answered more than 45,000 questions from Logitech customers. He spends about six hours a day monitoring the forum, six days a week, and prides himself on being the first to answer any question about a webcam.
But KachiWachi isn’t a Logitech employee, and Logitech has never paid him a cent. He’s just a friendly geek—with a lot of time on his hands—who happens to believe that Logitech makes the world’s best webcams.
If every company could somehow recruit platoons of super-passionate evangelists like KachiWachi to intercept and answer customers’ questions, it would be a compelling way to save money on traditional customer support. Well, there’s a company in Emeryville, CA, that claims it’s possible to build online communities where these “superfans” can be systematically cultivated and encouraged to work their magic. It’s called Lithium Technologies, and it has emerged as one of the most talked-about providers of so-called “social CRM” software (as in customer relationship management).
Logitech is a longtime user of Lithium’s community hosting software, as are AT&T, Best Buy, Hewlett-Packard, Home Depot, Sephora, Verizon, and nearly 500 other consumer-facing enterprises. While a Lithium-powered community is not a substitute for actual customer service—KachiWachi can’t send a customer a new webcam—it can be a useful front yard for a company’s support operations. If you call HP, for example, the first thing you’ll hear is a recorded message asking if you’ve checked out the HP support forum, which runs on Lithium.
“If you are the size of HP, you can get millions of people to go there” rather than wait to speak with an agent, says Lyle Fong, Lithium’s co-founder and, until this fall, its CEO. “Then the question is how do you get them not to trash your brand, but to give you constructive criticism about how you can improve your product, and spread word of mouth and answer questions from other customers, and create a curated knowledge base à la Wikipedia.” These kinds of positive interactions “don’t happen accidentally,” Fong says, and Lithium has now had a decade of experience figuring out how to foster them.
The company was founded in 2001 as an offshoot of the video game community Fong was running with his brother—more on that bit of history in a moment—but it wasn’t until 2007, when Fong took over as CEO, that Lithium went into aggressive-growth mode. Since then, it’s grown to 170 people and raised $30 million in funding from Benchmark Capital, Emergence Capital, and Shasta Ventures, DAG Ventures, and Tenaya Capital. (The company has raised $44 million all told.) Last month Fong handed the CEO reins to Adobe and EMC veteran Rob Tarkoff, an operations expert who was brought in to make sure the company keeps growing its customer base. Fong is now chief strategy officer.
The two executives have a big opportunity in front of them: analysts at research firm Gartner expect the social CRM market to grow to $1 billion by the end of 2012. But as companies look to improve customer satisfaction, Lithium will have to compete with a growing number of alternative platforms, such as community software from Get Satisfaction and Jive, Facebook and Twitter monitoring tools from Assistly (now part of Salesforce), and virtual agent technology from VirtuOz and Next IT. Lithium’s challenge is to
