Crowdsourcing: How to Effectively Leverage the Collective

Crowdsourcing
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The role of the consumer has changed dramatically in the past few decades. Whereas Crowdsourcingonce consumers were viewed as flocks of sheep that were steered and directed by the advertising gurus of the day, today's consumers are smart and independent individuals who are actually taking the direction of businesses, brands, advertising campaigns, and marketing strategies into their own hands. Many businesses are jumping on board a new trend known as "crowdsourcing." Crowdsourcing is a new business task wherein a company asks for the assistance and expertise of a huge population of consumers. Sifting through the thousands of results, ideas, suggestions, and submissions of consumers, businesses are often able to find the solutions to their problems at very little cost.

Lindsey Savino, on Daily Infographic, recently posted this helpful infographic that explains the benefits of crowdsourcing and why businesses are opting to use the expertise of the collective to get basic business jobs done.

What is Crowdsourcing?

Crowdsourcing is a portmanteau, or word blend, of the words "crowd" and "outsourcing." When a business outsources important work, it hires a third party to handle tasks such as customer service, product research, or quality control. This, however, can be expensive, because businesses have to pay for labor and operating costs to keep this third party functioning smoothly. With crowdsourcing, the business outsources a variety of tasks to a huge population of consumers, inviting any interested people to voice their opinions, submit solutions, and get the job done.

One great example of crowdsourcing involves the innovative online movie-streaming company Netflix. Netflix uses a complex algorithm to evaluate the movies that consumers have viewed and liked in the past to suggest new movies in which consumers will be interested. There were, however, some flaws with Netflix's algorithm, and consumers were starting to complain that suggested movies were irrelevant or badly selected. Netflix came up with a brilliant solution. The company offered $1 million to anybody who could create a better algorithm for suggesting movies to paying customers. Naturally, thousands of software designers and coders put their heads together to develop an algorithm for Netflix. By offering something worthwhile to a huge population of consumers, Netflix was able to harness the limitless power of the "collective."

Where Did Crowdsourcing Come From?

Crowdsourcing, while gaining massive amounts of attention in the past few years, is actually not a new concept. Different elements of crowdsourcing have been used for decades. When businesses began operating telephone hotlines where consumers could call in and voice their opinions on a variety of subjects, they were essentially investing in crowdsourcing techniques. The real difference with modern crowdsourcing is the number of consumers that can be reached and the prevalence of these techniques.

Essentially, crowdsourcing and its many facets developed in the wake of two different trends. First, business owners realized they were going to have to find less expensive ways to run a business. Second, business owners started recognizing the potential of tapping into the collective intelligence of a large group of people. By combining these two trends, many social-savvy business owners realized they could access inexpensive services, input, and opinions by trusting the collective brilliance of the global consumer population. Crowdsourcing, as it is used today, was created.

Because of the virtually limitless reach provided by the Internet, businesses are able to access enormous populations of everyday consumers to help tackle expensive business tasks such as industry research, brand development, logo design, and even advertisement generation.

Computers Can't Do What the People Can

One big reason why companies use crowdsourcing to accomplish tasks is that people can do many things that consumers simply can't. For instance, if a business needs to organize and categorize thousands of photographs or websites, a computer can only accomplish so much. Computers can't identify the elements of a photograph, but consumers can. Websites with stock photographs ask consumers to "tag" photos with different keywords, so that other consumers can search for those photographs more easily. When you've got tasks that can't be completed by an algorithm, crowdsourcing may be beneficial.

Choose the Best From the Collective

Crowdsourcing can also put a business into contact with a huge assortment of choices for things such as logo and website design to new product ideas. For example, if a business wants a logo redesign, there are two basic options. The first option involves hiring a single professional to design the logo. However, there's always a chance that an individual simply won't understand the direction, concept, or vision of the logo. The other option, crowdsourcing, encourages thousands of consumers to submit logo designs. The company can then choose the design that suits the brand best and compensate the winning designer.

Understand Your Target Audience

Crowdsourcing also provides a business with the chance to understand its target audience a little better. When you invite consumers to sound off on decisions such as new products, advertising campaigns, brand image, or website design, you will learn what your target audience values. You'll also allow consumers to feel like they've had a part in developing or enhancing your current brand.

Con: Edging Out the Professional

There are some perceived cons to the crowdsourcing trend. Some analysts believe that crowdsourcing is beginning to edge out the experienced professional from finding work. When businesses use crowdsourcing websites, such as Elance or oDesk, to find graphic designers, writers, and web designers for various business tasks, the professional companies that offer these services may get neglected. Still, many professional companies and service providers are establishing profiles on crowdsourcing websites so they don't miss out on any of the posted jobs or opportunities.

Crowdsourcing in the Future

Businesses that are looking for inexpensive ways to outsource important business tasks will benefit greatly from crowdsourcing in the near future. Websites that pair businesses with crowds of consumers are expected to grow exponentially in the next decade. With advances in social media, blogging, and web marketing, businesses will discover the benefits of harnessing and leveraging the power of the collective to save money, improve relationships, learn about a target audience, and access high quality and talented individuals.