Crowdsourcing has come into its own in recent years. The term is used to describe a collaborative design or advisory effort, typically one that harnesses the Internet; recent high-profile examples of crowdsourcing have helped push the practice into the mainstream. Netflix, for example, offered a $1 million prize to anyone who could build a better recommendation algorithm for its movie-rental website. And a 2004 competition, the Ansari X Prize, offered $10 million to spur the development of privately manned spacecraft.
But a small business owner is unlikely to dangle a six- or seven-figure carrot in front of would-be innovators. She can, however, use some principles of crowdsourcing to improve awareness of her brand and learn more about her customers, just as she would use accounting software to learn more about her business' finances.
Principle 1: Crowdsource Wisely
Unless a small business owner is willing to offer a substantial cash prize or grant participatory rights in her company, she should not plan on crowdsourcing an essential part of her business' activities.
Pepsi crowdsourced a can redesign in 2007, but it would not have asked Pepsi drinkers to create a new formula or revamp the company's distribution system.
Similarly, a small business owner may want to crowdsource a logo design or solicit guidance from her customers on a product or service. The guidance can be as simple as a brief poll or a feedback section on the business owner's website. If an entrepreneur blogs about the products or services she offers, she can solicit responses in the blog's comment section.
General Motors took this tack five years ago when it introduced the FastLane blog. GM uses the blog to share company news; a recent video post has the interim CEO talking about the abrupt dismissal of his predecessor, for example. And a "Webchats" feature allows site users to submit questions for GM executives. Users are invited to involve themselves in GM's product development in the Lab blog; the Lab welcomes comments and criticism about vehicles in the pipeline.
Principle 2: Target Crowdsourcing on a Single Feature or Product
Crowdsourcing is, as its name suggests, open to a crowd—everyone willing and able to make his voice heard. But companies that crowdsource do so intelligently: they ask the crowd to focus its energies on one product, service, or design feature.
Pepsi didn't ask consumers to redesign the brand's marketing; it simply accepted submissions for a can redesign. Nor does GM ask drivers about their vision for a brand; on FastLane and the Lab, the company simply introduces a concept or sketch and solicits feedback.
With that in mind, crowdsourcing-minded entrepreneurs should think small. Perhaps a small business owner's company is so diminutive that it lacks a website; in that case, she can rely on face-to-face interaction to crowdsource. The owner of a dog-grooming service can query her customers about other services they'd like her to offer or inquire about the ways in which she could improve her current offerings. Suggestion boxes are nothing new among customer-facing enterprises; crowdsourcing takes this to the next level by encouraging customer interaction.
In fact, Web-based crowdsourcing is really just a proxy for interpersonal engagement. If a small business owner can actually enter a dialogue with customers about the products or services she offers, so much the better.
Principle 3: Leverage Crowdsourcing to Improve a Business
One of the main goals of crowdsourcing is to build brand awareness. Pepsi didn't really believe that consumers would design a better can than a professional design team would, but by encouraging regular people to participate in the design process, the soft-drink company ensured that consumers felt more connected to the brand.
The other major goal of crowdsourcing, in fact, is for a company to connect better with its customers. Learning about customer tastes and desires will help build the foundation for future product or service introductions; a business owner can assume, too, that engaged customers are likely to be the best customers in the future.
Unless she truly engages with customers, a small business owner cannot fully understand their needs and wants. Businesses exist to serve customers, and entrepreneurs who enter into dialogues about customers' desired kinds of service can work harder to deliver what they want.
Perhaps an interior designer finds that her clients want landscape design services, too. That may not be her forte—but she can consult or even partner with a landscape designer. The two can then work in tandem to offer a more complete, more desirable home design service. Both are likely to enjoy additional revenue as a result.
In Conclusion
Small business owners should look for revenue anywhere they can find it, especially with the economy in its current state. Crowdsourcing can increase customer traffic and raise brand awareness, leading to higher cash inflows—which can be tracked with accounting software—both now and in the future.
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