3 Reasons Crowdsourcing is Good for Small Businesses

By: Rob Hoehn

Running a small business is not easy, especially when the small business is just starting out. Any misstep, even well-intentioned, can cause a serious setback. But have no fear! There’s a whole untapped squad of people out there ready to work for you for free! Here are three ways crowdsourcing is good for small businesses.

Time after time, crowdsourcing has been shown to improve efficiency. While some campaigns and ideas may need a bit more time to develop, sometimes the process needs to be expedited. What’s more, crowdsourcing can help to make the process easier, saving manpower on things like focus groups. Who needs a focus group when you’ve basically already done that through your crowdsourcing efforts? It lets small businesses spend time and energy on actually producing the desired response, rather than finding out what that response is.

In a recent New York Times article, Lee Mayer, the chief executive of an interior design site called Havenly, spoke about her experience with crowdsourcing, and how it has been able to help increase efficiency when on a crunched timeline. “Crowdsourcing is fast, cheap and scruffy…especially when you need to move quickly.” Time is something we never have enough of, so if you can find a way to save yourself time and grow your business simultaneously, you should jump at it.

Crowdsourcing also allows you to maximize use of resources. While some companies can try many different products and services, and not need to worry as much about immediate ROI, small businesses often do not have that luxury. Sometimes a failed test run can be devastating to the bottom line for a small business. Hearing directly from your consumers can help determine what would be most useful for them, and allow you to skip straight to the successes.

Crowdfunding, a subset of crowdsourcing, is also an excellent way to effectively utilize your resources, with money and with your audience. The consumers of your product are going to be the most likely to want to invest in something new, and they might be willing to help you make it happen. In the aforementioned New York Times article, Josh Gustin, co-founder of an online men’s wear store, shares how the model of crowdfunding clothing has resulted in a “deeply cost-effective” approach.

The third reason is a double whammy: customer engagement. Not only does crowdsourcing help your customers know that you care about their opinion, it also allows you as a small business to garner information and to increase customer loyalty. One of the ways that small businesses are utilizing their customer base is in specifically asking them, “What kind of products or services that we do not currently have would you like to see us provide?” That question also ties back nicely with the efficiency and maximization of resources. The responses to that question can help save time that could be wasted in development, only to have an idea not resonate with your consumers; they also help maximize your other resources by saving money on expensive focus groups and potentially undesired “improvements.”

In this Business News Daily article, Jon Olinto, co-founder of the b.good Family Foundation, spoke on this idea of customer engagement. He said, “As long as you’re willing to turn decisions over to the customers, you can empower them. Anyone who participates is automatically engaged with the company and part of its story.” You want your customers to be part of the story!

To learn more about how crowdsourcing can serve small business, download IdeaScale’s white paper.

So if you are the owner of a small business, consider utilizing crowdsourcing in the future, because crowdsourcing may be the key to substantial growth.

By Rob Hoehn