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Advantages and Disadvantages of Crowdsourcing

With so many social media avenues and interactive platforms for consumers to give feedback, it is no surprise a variety of companies are turning to crowdsourcing to get their next big ideas. Crowdsourcing can range from posing a simple question, all the way to hosting elaborate contests. While many examples of crowdsourcing have been runaway successes, there have also been many embarrassing PR disasters. Here are some of the pros and cons to weigh:

Pro: Creates a buzz from the grassroots

Crowdsourcing can be an excellent marketing tool. There's a reason some of the biggest corporations and organizations in the world have turned to crowdsourcing in recent years: it gets people talking. In marketing, you're competing for eyeballs. Creating a successful crowdsource experience can get a ton of buzz and even go viral. Even better, crowdsourcing often appeals to your brand evangelists, those invaluable customers who spread word of your business simply because they are proud, enthusiastic customers.

Starbucks has great success with their foray into crowdsourcing with My Starbucks Idea. Through their website, they allow customers to engage and give feedback, vote on fellow ideas proposals and suggestions. They have had an outpouring of information and implemented quite a few changes in their business to reflect the customer-generated ideas. Starbucks has done an excellent job of cultivating a relationship with their coffee-enthused aficionados and uses their loyalty to the brand to gain important customer perceptive.

Con: The Crowd is public and can turn on you

There's no privacy in crowdsourcing. Your customers, competitors and the broader world will all be aware of what you are trying to achieve. Invariably, there will be many entries or suggestions that are just not realistic to implement.

Crowdsourcing can also get off track. Adding a popularity contest to the mix helps increase interactivity but cedes much of the power to the group. This has created some trouble with crowdsourced outcomes in the past. Television personality Stephen Colbert famously hijacked NASA's attempt. When the space agency asked the public to name a portion of the future American space stations, fan support in the tens of thousands catapulted him to the lead, after he campaigned for consideration on his show.

Public direction might also take you down an unwanted direction. American Apparel encountered a PR nightmare when their search for “the Next BIG Thing”, a crowdsourced model for their plus-size line, took a sharp turn. In this case, only thing American Apparel spread was bad word of mouth.

Pro: Cost-effective

Don't want to spend on consulting firms or hiring more “idea people”? Crowdsourcing is an alternative and depending on how you go about strategizing, it can incur minimal costs. Hypothetically, by reaching out to your business' personal crowd of customers, fans or followers, one can get a mass amount of people thinking and brainstorming on your its behalf. Add an incentive and you'll have many eager people working for a fraction of the cost of an individual specialist or firm.

Con: Good things NEVER come for free

Don't be fooled into thinking that crowdsourcing translates into zero costs. First of all, your target crowd, while eager and enthusiastic, is not stupid. Taking advantage of people could easily turn into a PR nightmare. Remember, going viral works both ways and last thing any company wants is the crowd working against them. Adding incentives, if not done carefully, could result in driving up costs. Always know what you are getting into with clear terms.

Also take into account the amount of time that will go into sorting submissions or scouring ideas for ones that are of high quality. Lastly, legal risks could come into play with intellectual property and infringement to think about. All of this could be costly.

Pro: Great way to discover unknown talent

Many very talented individuals fly under industry radar. Opening up to crowdsourcing and public input is an excellent way to identify new talent. A task or contest to solve a company problem or market a new product could attract talent to you. Forget a newspaper or Craigslist jobs ad and unqualified cookie-cutter resumes, crowdsource and you might find just find the employee of your dreams!

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