Сrowdsourcing is the process of exploring customers’ ideas, opinions, and thoughts available on the internet from large groups of people aimed at incorporating innovation, implementing new ideas, and eliminating product issues.

In this article, we’ll uncover how crowdsourcing works and what benefits it brings. We’ll also compare crowdsourcing and crowdfunding, and explore the types and examples.

How does crowdsourcing work?

With crowdsourcing, companies can collect information from customers and use it to their advantage. Brands gather opinions, ask for help, receive feedback to improve their product or service, and drive sales. For instance, Lego conducted a campaign where customers had the chance to develop their designs of toys and submit them. To become the winner, the creator had to receive the biggest amount of people’s votes. The best design was moved to the production process. Moreover, the winner got a privilege that amounted to a 1% royalty on the net revenue.

By using people’s skills, work, and opinions, businesses manage to save their time and resources on developing a product or improving it. Often, people from outside the company can provide brands with amazing ideas, skills, and knowledge they can use to convert more customers and receive bigger profits.

Now that you know how crowdsourcing works, it’s time to explore the benefits. The next section will unveil why you should consider this technique for your company.

Benefits of Crowdsourcing

With crowdsourcing, business owners can reap various benefits, from saved costs to employee salary. However, these aren’t the only advantages. In this section, we’ll review all pros you can obtain after a successful implementation of crowdsourcing.

First, this marketing approach helps you find solutions to problems your team has worked on for a long time. These solutions are often out of the box and enable brands to drive customers’ attention fast. Many famous brands rely on experts outside the company to change the usual way of thinking and ideas. New people solve existing problems, provide different solutions, and bring new ideas to a business. As a result, brands gain new approaches to various difficult situations with products and clients.

By engaging people outside the company, a business can create marketing buzz around its product. Crowdsourcing causes competition among customers and word-of-mouth marketing. Let’s take Lay’s ‘Do Us A Flavor’ campaign which was widely discussed by people. They encouraged buzz by inviting people to create a new taste for Lay's potato chips. More people were willing to participate in this competition and win it. Customers strived to try the new release.

Companies have more customer insights. After gathering data from customers, brands manage to understand customer preferences, needs, and desires. As a result, they can offer personalized solutions. Customer satisfaction increases, and sales rise.

Now that you know the pros, let’s proceed to the difference between crowdsourcing and crowdfunding. Since there’s often confusion between these two terms, we need to uncover the difference.

Crowdsourcing vs Crowdfunding

There’s a big difference between crowdsourcing and crowdfunding, so it’s essential to understand each term in detail. We’ll unveil the distinctive features so that you can differentiate them.

Crowdsourcing is a marketing technique that seeks experts outside the company and searches for opinions, customer feedback, and solutions. It helps entrepreneurs get new ideas for their companies and reach their business goals. With the help of experts outside the company, business owners can bring new thoughts and strategies.

Crowdfunding is a marketing approach that seeks resources for various projects like charities, startups, and other initiatives. People who contribute to these projects don't expect any money back. Everything is done on a volunteer basis. Examples of such platforms include Indiegogo and Kickstarter, where people can donate money to charities, projects, and individuals.

Now that you know the difference, let’s jump into the types.

Types of Crowdsourcing

There are four main types of crowdsourcing. In this section, we’ll review each of them in detail.

  • Wisdom of the crowd. It’s a collective opinion of different individuals gathered in a group. This type is used for decision-making since it allows one to find the best solution for problems. Many brands pay attention to the collective opinion of their customers because they help bring their businesses new ways of thinking, ideas, and strategies. As a result, the overall performance of a company improves.
  • Crowd creation. This type involves a company asking its customers to help with new products. This way, companies get brand new ideas and thoughts that help a business stand out. For instance, McDonald’s is open to new ideas from its consumers. The famous fast food company asked customers to create their perfect burgers and submit their ideas to the brand. The company released winners’ burgers each week, including the creator's short bio.
  • Crowd voting. It’s a type of crowdsourcing where customers are allowed to choose a winner. They can vote to decide which of the options is the best for them. This type can be applied to different situations. Consumers can choose one of the options provided by experts or products created by consumers. For instance, if a brand asks its consumers to create a new taste, package, or design of a product, other consumers vote to identify the best one.
  • Crowdfunding. It’s when people collect money and ask for investments for charities, projects, and startups without planning to return the money to the owners. People do it voluntarily. Often, companies gather money to help individuals and families suffering from natural disasters, poverty, social problems, etc.

Now that you know the types, it’s time to discover the examples. They will inspire you to create your own unique crowdsourcing strategy.

Examples of Crowdsourcing

Cost and time-efficient crowdsourcing is widely applied by big brands. Companies strive to do everything possible to meet customers’ requirements and they can do it with crowdsourcing. In this section, we’ll unveil several examples that demonstrate how the technique works and review the benefits it brings.

Lay's

Lay's, the world-known producer of potato chips, created the ‘Do Us A Flavor’ crowdsourcing campaign. The campaign lasted for around ten months and aimed at finding a new universal taste its customers would love. The brand encouraged consumers to think of a new taste of chips they would like to eat. After voting, customers identified ‘Cheesy garlic bread’ taste as the winner of this competition. After its release, Lay's had an 8% increase in sales.

Waze

Waze is an app that provides users with information about closed roads, traffic jams, and the fastest routes. The company is based on crowdsourcing because it receives current information about traffic from people. Users update the app on closed roads and in traffic jams. Moreover, the platform calculates the average drivers’ speed to identify overcrowded roads.

Congrats, now you know what crowdsourcing is and why it’s essential. Hope that our examples inspired you to use this marketing approach for your business.

References:

  1. This article defines the term and uncovers the difference between crowdsourcing and crowdfunding.
  2. In this article, you’ll find some excellent examples.
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