Crowdsourcing as a Small Business Marketing Strategy

by Jennifer Schiff

Crowdsourcing, or using your customers to help with product development and/or marketing, is becoming increasingly popular with small businesses. But is it the right strategy for your business?

More ecommerce businesses are using the crowd (i.e., their customers, Facebook fans and/or employees) to help them develop new products and build brand loyalty -- and the strategy seems to be working, at least for some online businesses. But is crowdsourcing a viable marketing and/or product development strategy for every small business? And how do you successfully harness the power of the crowd? Small Business Computing spoke to several ecommerce businesses that tried crowdsourcing to find out.

What’s in a Name? Ask Your Customers

OfficeDrop.com; small business marketing, crowdsourcing
(Click for larger image)

When document scanning and management company Pixily decided to change its name to something more memorable and more representative of its business, instead of having senior management come up with a new name or hiring a branding consult, it decided to throw the process open to the crowd. The company turned to its employees and customers, “the people who know the most about your business,” explained Healy Jones, vice president of marketing for OfficeDrop (formerly Pixily).

But rather than just throwing out names and seeing what stuck, Jones and the rest of Pixily’s senior team did a very structured crowdsourcing, dividing the task of coming up with a new company name into three distinct phases, the last of which would be a customer survey.

“The first thing we wanted to do was get as many potential names as we could,” said Jones. “So we started with our employees, who are very creative.” To that end the company held a day-long, company-wide brainstorming session to come up with ideas -- and wound up with around 100 potential new names, which they then narrowed down to 30. They then went online to see if any of those names were already taken and crossed off the ones that were.

To further whittle the list down to a more manageable number, management created an in-house vote-based survey, which it emailed to all employees. Then they started informally chatting up customers and partners, asking them what they thought of the name Pixily and about the company changing its name to something more user friendly.

Having managed to shrink the list of potential names to 10, and having received the blessing of customers and partners, Jones and Pixily’s CEO, Prasad Thammineni, then put together a formal customer survey, which they sent to the company’s considerable opt-in email list.  Although the survey wasn’t short, “it was one of the most opened emails we ever sent,” reported Jones.

And thanks to crowdsourcing, not only did Pixily come up with a great new name, OfficeDrop, which was the number-one name chosen by both their customers (who then spread the word on Twitter) and their employees, the company boosted its employee and customer relationships as well as its sales.

Need Help Choosing a Design? Ask Your Facebook Fans

For SitStay.com, which makes “good for your dog supplies,” the decision to crowd source was done on a whim.  Chief Dog Spoiler Kent Krueger asked a designer to come up with an assortment of labels for a line of SitStay-branded dog treats. After receiving more than half a dozen great designs, he asked his employees which one was their favorite. But they were unable to come to a consensus. So, on a whim, he decided to post all eight labels on the company’s Facebook page, which has more than 21,000 dog-loving fans, and asked them to “like” their favorite.

The result: “The number of likes and comments was tremendous,” said Krueger, and “the crowd” quickly identified a favorite. Not only that, his Facebook fans made the label even better by pointing out “something we had missed totally,” namely that “Made in the USA” was missing -- a point that's very important to his demographic and for dog treats in general, he explained.

Asked whether he would turn to SitStay’s Facebook fans again, Krueger said “absolutely,” though he added that the social media site (and crowdsourcing in general) might not be the right way to go for every business.

“For us, Facebook was the perfect location as our Facebook fans are very social and pretty vocal about what they like and what they don’t like,” he said. If you have a large, very social group of Facebook fans, polling them or using them to help with product development could be a good idea.

However, “if you have a fan group that isn’t social or isn’t vocal, or you only have a small number of Facebook fans, you might not get anywhere,” he added.

Turn Your Website into a Community Forum

When she started Minted in 2007, founder Mariam Naficy’s goal was to “bring the best in design on paper to consumers.” And she planned on doing this by selling invitations and stationery from high-end stationery companies. Then Naficy heard about a t-shirt company called Threadless, where visitors voted for their favorite t-shirt designs, and she fell in love with the concept of crowdsourcing.

Soon after, she decided to experiment with “the wisdom of the crowd” on Minted, inviting designers from all over the world to submit their card designs and inviting customers to vote on them right on Minted’s website.

The experiment was so successful that over the last two years the company has shifted from being a middleman with some crowd-sourced products to an almost entirely crowd-sourced model, “Ninety-nine percent of our sales come from products that are crowd sourced,” said Naficy. Today, Minted is a community-centric company where any designer can submit an entry (or several) to the site's monthly design challenges, and anyone who has registered (for free) can vote for their favorite designs.

Moreover, Naficy added, crowdsourcing has yielded better designs, more visitors and fans (on Facebook), and more sales than if Minted had continued to just sell cards produced by other stationery companies. 

Tips on When and How to Use the Crowd

Clearly, using the crowd -- whether it’s your employees, your customers, your Facebook fans and/or your Twitter followers -- can be a good idea, as well as good for business. But is crowdsourcing a good idea for every idea or for every business?

“I think that using the crowd, in particular using your customers, is a great way to get a lot of [good] ideas,” said OfficeDrop’s Jones. “And it builds excitement for what you are doing. So it’s a great way to build a little bit of buzz before you launch.”

“I think it’s the future of the retail,” stated Minted’s Naficy. “Retailers who produce goods for consumers need to become much more open to consumer input in their decision-making process.” Though she admits that it’s much easier for nimble startups to try or shift to a crowdsourced model than for larger, more established retailers.

First and foremost, though, before you do any kind of crowdsourcing, “you need to consider your audience [e.g., age, gender, how likely they are to use or participate in social media] and make the determination whether it’s going to help or hurt,” said SitStay.com’s Krueger.

For example, “don’t just go out and randomly use Twitter or Facebook,” cautioned Jones, “because you can get a bunch of 22-year-old people who’ve never used your product before. Get people who are your target demographic, the people who will potentially be using your product.”

It’s also wise to limit the number of choices you make available to consumers. “There is this issue of paradox of choice, where if you show somebody a thousand items … that it might be too daunting,” said Naficy. And you risk overwhelming or alienating the very people you are trying to attract.

For both OfficeDrop and SitStay.com the optimal number of choices for consumers to choose from to achieve a single winner was around 10, whereas Minted typically gives visitors hundreds of designs to vote on, from which they often choose hundreds of winning designs.

Jennifer Lonoff Schiff is a regular contributor to SmallBusinessComputing.com and writes a blog for and about small businesses.

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This article was originally published on Thursday Aug 19th 2010
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