Making Crowdsourcing & Online Reviews Integral to Small Business Success

The most common issues facing owners of small to medium size businesses can be distilled to these three concerns: how to increase brand awareness, how to secure legitimacy and how to generate brand loyalty—all without tapping a large marketing budget. While there are no magic bullets in business or in life, companies can make crowdsourcing and online reviews central to their business practices to overcome each of these major issues.

Crowdsourcing offers a way for executives to address the company’s obstacles while improving their brands’ reliability and performance. Crowdsourcing helps companies push the boundaries of innovation to improve overall customer satisfaction and achieve financial success.

Consumer-generated content, such as fan videos posted on YouTube or photos of consumers using products on Instagram or Facebook, can be like money in the bank. Online reviews posted by consumers on sites such as Yelp, Angie’s List and TripAdvisor likewise fall under this category of crowdsourcing. With the potential for remarkable results at marginal cost, crowdsourcing enables small- and mid-size companies to remain competitive in an environment dominated by large enterprises.

Increase Brand Awareness Using Crowdsourcing

One major problem facing small to midsize companies is figuring out how to increase brand awareness without breaking the bank. Since large corporations have much bigger budgets, it is simply impossible for smaller players to keep up with them, ad-for-ad. Crowdsourcing is an ideal solution to this problem. In order to compete, smaller companies need to leverage consumer-created content in their marketing strategies and their advertising practices. To counter the high cost of traditional media buys—especially for TV and magazine advertising—smaller companies need to focus on applying technology and social media communications in their business practices.

Aside from being less expensive, social media-driven communications are generally regarded as more authentic than traditional media. Crowdsourcing can be used to increase awareness and engagement by giving more control of the brand image to consumers themselves. The key is having a plan to implement and exploit these ideas effectively. Being seen as an authentic brand is essential to becoming a strong brand, since consumers are instinctively drawn to companies that are perceived to be more authentic than their competitors. Authenticity works because it builds brand identity into something influential and gives substance to the business.

Camera company GoPro is a great example of an organization that has implemented crowdsourcing and is perceived as an authentic brand. GoPro has capitalized on the trend of using consumer-generated content; the company’s marketing strategy differs markedly in its reliance on crowdsourcing for content rather than on an advertising agency. When company executives saw that consumers were uploading at least one GoPro video to YouTube every minute, they realized how much compelling content real users were sharing. Understanding the impact of this authentic footage, the company began using consumer videos on YouTube in its advertising campaigns.

GoPro also uses its social media pages to feature content from customers by showcasing a video or photo of the day. Storytelling is a large part of this strategy, enabling customers to feel an emotional connection and shared experience with the brand plus building a strong following in the process.

Social media is also a big part of GoPro’s communication with its customers. As of June 2014, GoPro had nearly 1,000 photos and more than 2.25 million followers on Instagram, nearly 7.5 million likes on Facebook, and about 1 million followers on Twitter. In May 2014, the company filed publicly and announced that it had booked nearly $986 million in revenue during 2013.

Although the company is no longer small, small companies would be wise to use GoPro as a model of how to improve their own businesses. Having quickly gone from a small start-up to an IPO, GoPro has almost doubled revenue every year since its founding in 2004. GoPro is a prime example of how significant the results of crowdsourcing can be. By inviting customers to share how the GoPro product is part of their lives, the company has grown organically and remained authentic to its target market.

Increase Legitimacy Using Crowdsourcing

Establishing legitimacy is an issue for almost every small company. A great many small businesses lack a physical storefront and sell their products and services online only. Having a physical presence tends to increase the legitimacy of the business, since most consumers are more willing to trust a business that has a physical location that they can walk into, try out products before they purchase and speak to someone face-to-face if they have questions. The problem is that to launch a brick-and-mortar store is much more expensive than an online store.

So how can a small business provide verification and establish legitimacy without a physical presence? The answer: online reviews. In my recent study with Review Inc., we surveyed managers and business owners about their business practices and how they perceived and used (or didn’t use) online reviews. In our survey we found that 51 percent of our respondents did not monitor online reviews. This was an eye-opening result, since virtually all prior research had shown that consumers used online reviews frequently before making a purchase.

To discover why there was such a big disconnect between consumer and company perceptions of online reviews, we conducted more than forty in-depth interviews with managers, executives and business owners. In these interviews we itemized the top reasons why companies were not using reviews: “I never thought of using or checking reviews;” “reviews don’t matter to my business;” “I’m scared to look, for fear of reading negative review;” “a lot of reviews are biased or fake;” “only dissatisfied consumers write reviews so majority of reviews are negative;” “I don’t have time or resources to manage reviews,” and so on. But the truth is that these negative perceptions of reviews are misconceptions. To succeed, managers and business owners need to take online reviews more seriously.

To succeed in a highly competitive marketplace where consumers have many choices of companies from which to buy, it is crucial for growing concerns to pay serious attention to their online reviews. By monitoring reviews and responding directly to disgruntled reviewers, a company takes important steps toward building customer relationships. By using customers’ comments in reviews as valuable insight into the market, companies can apply that feedback to improve their overall business practices. Not only do businesses need to recognize the importance of reviews, they also need to boost the number of their reviews.

Another recent study, by MOZ, also revealed how important it is to establish a positive reputation and increase SEO using online reviews. Consumers perceived that having a large number of reviews was in itself a sign of legitimacy. Consumers also cited consistency of information online, the number of recent postings, the quality of reviews that contained keywords, breadth of sites in which company is reviewed and the existence of balance overall (that is, that reviews were both positive and negative). Small companies need to pay close attention to their online presence, through reviews, to maintain a positive reputation—and use the review process to address negative perceptions of the brand.

Increase Brand Loyalty Using Crowdsourcing

Companies who reward consumers for their participation in tackling brand challenges are able to increase loyalty by doing so. Having a platform for consumers to share their opinions and ideas provides a unique way for them to engage with the brand. This engagement directly increases customer loyalty, since consumers feel as though they are part of something—and in fact they are. By staying engaged, a company can demonstrate its commitment to the customer and create a sense of belonging within the brand community.

Once a company solicits ideas from its consumers, the communication process has begun, and it’s essential that the conversation be two-way moving forward. Before starting that conversation, companies should have a clear plan in mind of how they intend to interact with consumers. With a communication structure in place—one that provides for immediate feedback and idea validation—consumers will know that their ideas and suggestions will be heard. By encouraging this kind of engagement, a company can, over time, turn its online audience into brand advocates.

Through these kinds of deliberate, thoughtful actions, small companies are in a position to enhance their accountability, increase trust and build brand equity. Incorporating crowdsourcing into business practices can enable any brand to become more credible and enable communications to become more believable. Using creative crowdsourcing in social media channels, online crowdsourcing platforms and review websites, small and mid-size companies can effectively build authenticity, legitimacy and brand loyalty—without breaking budgets or even breaking a sweat. Incorporating a proactive social media strategy into core business practices marks even an emerging company as reliable and trustworthy, and it enables consumers to connect to the business in powerful, memorable ways.