The Customer Knows Best: Using Crowdsourcing to Build a Better Business

By Heger, Monica | Success, June 2010 | Go to article overview

The Customer Knows Best: Using Crowdsourcing to Build a Better Business


Heger, Monica, Success


ROB LANGSTAFF knows shoes. He spent 16 years working for Adidas, including two years as president of Adidas Japan and one year as president of Adidas America. Yet, when he walked away from the second-largest athletic shoe company and started his own business in June 2008, it wasn't to impart his extensive expertise on shoes to others, but to let others design the shoes they wanted to wear.

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"I thought that a lot of companies had lost touch with their customers," Langstaff says. "In a lot of market-driven companies where you're marketing to the 17-to 25-year-old bracket, the marketing managers are usually men in their 40s and 50s." Instead, Langstaff wanted to take a bottom-up approach, giving customers input into the design. "You get a lot more diversity and range of ideas."

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From that concept of tapping into an existing customer base, sprang RYZ (pronounced rise), Langstaffs online shoe company featuring a line of shoes designed and selected by customers who vote on the ones they like best. The winning designer, chosen partly by users' votes and company officials' discretion, wins $2,000. RYZ then manufactures the shoe and sells it on its Web site.

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RYZ is among an increasing number of companies embracing this customer-knows-best approach. While each follows a slightly different model, they all fall under the umbrella of crowdsourcing, a term coined in 2006 by Jeff Howe, a contributing editor at. Wired and author of the book Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business. The term is loosely defined as taking a problem usually handled by a specific person (typically an employee) and presenting it to a broad, undefined group of people, or the crowd.

Using the Crowd to Solve Problems

The best-known example of crowdsourcing is Wikipedia, the free, user-contributed online encyclopedia. Netflix also used a crowdsourcing model to improve its movie recommendation system, awarding $1 million last September to a team that came up with a better algorithm.

But you don't have to base your businesses entire product or service on crowdsourcing to benefit from the wisdom of the masses and develop a stronger connection with your client base. Companies that specialize in providing crowdsourcing solutions are increasingly popular among small businesses that want to build relationships and tap into the community for feedback, while potentially saving time and capital that would be spent on solving big problems or brainstorming innovations. Some examples:

* Companies like InnoCentive act as the middlemen between businesses with wide-ranging problems and people who want to try and solve them for a fee. Businesses, which may remain anonymous, post their challenges and corresponding bounties, and InnoCentive's solver community of experts can work on whatever problem they want at their own leisure to try for prizes.

* The Web site BrandTags asks users to type in the first word or phrase that comes to mind when they see a particular brand, giving each company a list of searchable lags associated with their brand.

* LeadVine allows business owners to post sales leads they're seeking, name their referral lee and have the online community act as an extended sales force.

* And Inkling Markets provides crowdsource testing of your online or product designs, as well as identification of the most promising projects in your portfolio.

Engaging Your Community

Online T-shirt companies Threadless, founded in 2000, and Cameesa in 2008, use different variations of crowdsourcing to design and select T-shirts to sell on their Web sites. Threadless uses a combination of voting and its own discretion to determine which T-shirts are printed, while Cameesa relies solely on crowdfunding, in which participants buy shares of the design they like, and shirts that reach $1,000 get printed and offered for sale. …

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