The Right Crowd: What to Look for in Crowdsourcing

By Jeff Hull, Contributor

When 23andMe founder Anne Wojcicki first started to think about crowdsourcing, the term hadn’t even been coined yet.  Wojcicki was working on Wall Street when she heard the human genome had been sequenced in 2000, and she started to think about all the people who might be interested in knowing more about their genetic makeup.

She followed through on this idea by inventing a simple home DNA test, which allows consumers to learn about themselves and their health picture. But the results of these 23andMe kits paint more than an individual picture. Consumers can choose to allow the results of their DNA tests to be anonymized and added to a larger database for research purposes. It’s essentially crowdsourcing for the greater good – each individual contributes to better understanding of the variations of the human genome.

“Customers choose to opt into our research, which is one of the data points I love, because it shows that people actually really are hungry for information about themselves, and that people overwhelmingly actually do want to participate in research, and they want to actually contribute to society, they’re just looking for a path to do so,” said Wojcicki.

23andMe captures the essence of successful crowdsourcing as a business strategy.  The company gives consumers something they want while providing them with the opportunity to have a meaningful impact on the world.

“People overwhelmingly actually do want to participate in research, and they want to actually contribute to society, they’re just looking for a path to do so.” — Anne Wojcicki, Co-founder and CEO, 23andMe

The Rise of the Crowd

Not every company has such a clear vision of the potential of crowdsourcing, yet many companies are trying to figure out how to do it effectively.

Crowdsourcing—the idea of distributing work among many random individuals—is hardly new.  In 1714, the British government famously offered a prize to anyone who could solve the problem of accurately measuring longitude at sea. When the submarine USS Scorpion disappeared in 1968, the U.S. Navy turned to a collection of experts who found the sub after other search methods failed.

But the rise of connectivity, social media and mobile technology has led to a new focus on crowdsourcing. After an initial rush to try crowdsourcing everything from micro-funding (the wildly successful Kickstarter) to product naming (at which Mountain Dew famously failed in early attempts), businesses are now looking for ways to be smarter about how they can realistically benefit from the wisdom of the crowds. These companies are no longer questioning the value of crowdsourcing; rather, they’re striving to identify and develop the most effective means of crowdsourcing, integrating it into business strategy – from communications, social marketing campaigns, product development, promotional events and so on. Success in any of these endeavors requires finding the right crowd.

The Crowd You Know

Brands tend to choose between two sets of crowds for drawing information and ideas—the crowd they know, meaning their current pool of resources, or the crowd they want to know better, meaning the broader, more diverse customer base.  Both can work remarkably well, but one size does not fit all.

DEWALT, the subsidiary of Stanley Black & Decker that focuses on the professional construction, woodworking and manufacturing markets, has built tremendous value into crowdsourcing its R&D efforts using a large but highly specialized – or qualified – crowd.

DEWALT formed its Insights Forum, a community of 12,000 professional tradespeople, as a channel for rapid and real-world feedback from people in the field during the testing and ideation phases of product development. The company estimates it has saved $1 million in research costs last year and over $6 million since the forum started—and the company has built trusted, long-lasting relationships with customers.

Samsung also discovered a highly qualified crowd to tap – this one within its ranks. The electronics company formed a start-up incubator, C-Lab, to give company employees who have ideas outside of their daily job duties a way to pitch and develop promising products. Several promising virtual and augmented reality products have “graduated” from the incubator and made it to Samsung’s product line.  For Samsung, qualified crowdsourcing is a business strategy to free more potential from the talent Samsung already has under its umbrella.

As the U.S. Navy did during its crowdsourced search for the USS Scorpion, Samsung and DEWALT have selected and pre-qualified their crowd.  Qualified crowdsourcing is highly effective at solving certain problems and an excellent way for a brand to respond to and innovate based on customer input.

The Bigger Crowd

The second crowd set companies turn to for ideas and innovation – the thing they haven’t thought of yet – is the broader consumer base. For instance, many brands have asked their customers’ help in suggesting new products or naming them. When successful, these broader appeals have the advantage of opening the company to new ideas, engaging a deep pool of customers and generating brand lift.

But, a caveat: appealing to that broader crowd can also mean exposure to the whims of anyone within it. Creativity can cut both ways, particularly in the age of Internet anonymity. An early Mountain Dew promotion infamously invited users to name a new soft drink, prompting spammers to flood the contest site with suggestions so offensive the promotion had to be discontinued. The British government decided to let Internet users choose the name of a new research ship and wound up with Boaty McBoatface as the overwhelming winner.  And in a contest sponsored by VH1 to choose a location for a Taylor Swift concert, Internet respondents chose a school for the deaf.

Working with unstructured crowds requires disciplined business strategy and pre-campaign planning. One critical element is incentive.  People love a challenge, but they need to get something out of it to participate earnestly.

What Do Crowds Want?

Not surprisingly, money is a frequent motivator for crowd campaigns. BugCrowd, a competition among white-hat hackers to identify vulnerabilities in clients’ apps and hardware, uses straightforward incentives—the more complex the problem, the more the winner gets, with payments ranging up to $40,000 and averaging about $500. Lego crowdsources ideas for building block sets, lets their registered online users vote on the best ones, and offers 1% of future sales to anybody whose idea is approved. Since 2012, Lays has annually offered $1 million to the Facebook follower who comes up with the next generation of chip flavor—a real motivator and the reason the world has Southern Biscuits & Gravy potato chips.

Another viable incentive is the offer of an interesting experience. Even in a crowd, a personal touch matters, and offering a truly engaging brand experience helps generate crowds who care about a product or service enough to contribute quality ideas and feedback. BMW recently invited customers to design future models, for instance, with winners getting not only cash but a chance to visit the head of the design team in Munich and talk cars.

Marriott hotels has built an “innovation incubator,” the M Beta in Charlotte, North Carolina. Guests tap Beta Buttons—actual buttons positioned around the hotel—to generate real-time feedback on corresponding offerings like personal greeters, custom workout sessions and immersive dining experiences. It’s not just filling out a questionnaire for feedback. Real-time “scoreboards’ placed in the hotel keep participants up to date on the votes each new feature gets, allowing them to see the results of their input and giving them the sense of being part of the process building something new. In addition, Marriott’s simple thumbs up or thumbs down buttons yield structured data points, which are clean and easier to use in decision-making while also avoiding publication of potentially public offensive or embarrassing remarks.

A Little Give and Take

As crowdsourcing continues to evolve, brands will have to continue to find ways to “give” consumers something they want—be that a product, engagement, or an experience—in exchange for the information they “take.”

“We try to make sure that any way we weave in these sponsors, it’s additive to the user experience.” – Di-Ann Eisnor, Director of Growth at Waze

Other ways companies “give” involves partnering with other brands to create valuable customer experiences. Waze recently ran a co-promotion with Dunkin’ Donuts that allows consumers to experience the benefits of both brands. The Waze app identified the nearest Dunkin’ Donuts location, made it easy for users to pre-order from the road, drive to the restaurant and pick up their ready-to-go tasty treat. Di-Ann Eisnor, Director of Growth at Waze, says the goal of this “location-guided advertising” is to “try to make sure that any way we weave in these sponsors, it’s additive to the user experience.”

As the industry continues to develop, finding cost-effective ways to keep the crowds happily engaged and driving a positive feedback loop will lead to the most rewarding relationships for companies and their customers.