Why Crowdsourced Contests Rock!

What is a crowdsourced contest?

Companies reach out to the general public to come up with a solution to one of their problems, come up with a new product, or otherwise help them in some way in exchange for a reward.

For example, Lays’ Do Us a Flavor contest asks participants to submit new and creative chip flavors and recipes for Lays to implement. Lays then adds the winning flavor to their product line, and the winner gets sponsored on every bag, on Lays’ website, and wins $1 million.

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Facebook turns to the public to improve its existing product, as opposed to coming up with new products. Every year, the Facebook Hackathon invites some of the world’s brightest engineers and programmers to breach the security schema of Facebook or otherwise hack any part of the website, in exchange for massive cash prizes and employment considerations.

Lays, despite its collection of professional chefs, food enthusiasts, and taste inspectors, turns to the general public for more flavors. Facebook, despite its great assortment of brilliant programmers who know the website inside and out, turns to the general public to help it optimize its product. Let’s observe the benefits of these contests:

FOR THE COMPANY:

Innovation

What’s a better predictive measure of innovation- diversity or expertise? No matter how well you understand a topic, such as the chefs at Lays and their understanding of potato chips, you can’t produce innovation without changing your perspective- or inviting new perspectives to take a look at your products and services.

Cost Efficient

So should companies hire thousands of new employees to benefit from their diverse perspectives? Crowdsourced contests allow companies to leverage the views and inputs of thousands of participants in the general public, usually without having to pay them a dime (although the winners are usually awarded in some way).

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Starbucks’ White Cup Contest invites participants to design their white cups. It doesn’t even offer a grand prize for the winners, and is still wildly popular and successful!

 

 

Important Stakeholders

If you were in Lays’ shoes, would you rather produce chips that you want to eat, or chips that your customers want to eat? Crowdsourced contests create an open conversation between companies and the general public, and allow them to hone in and produce exactly what their stakeholders want. Threadless has founded their entire business model upon this concept!

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Brand Association

Crowdsourced contests are fun, exciting, and (with the right execution) popular amongst the general public. They are a great way to associate your brand with the positive feelings and motivations behind the contest, and strengthen the repute and recognition of a brand amongst a population.

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For the Contestants:

Autonomy, Mastery and Purpose

Aside from a given a set of rules and a deadline, the public is free to work on these contests in whatever way they seem fit, with no supervision and no consequences if they fail to complete the task.

In addition, these contests are usually competitive, leveraging the innate human desire to win and be good at something. This is particularly beneficial for contestants who have skills they cannot use on a daily basis, but that contests allow them to leverage in order to win.

Lastly, there’s usually physical prizes and awards for winners of these contests, but more than anything else, they deliver recognition to the winners. According to Dale Carnegie, appreciation and recognition are the most basic, intrinsic human psychological needs.

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qr_receiptCompanies should begin to leverage crowdsourced contests much more, especially given the theme of the sharing economy that is so prevalent in today’s world. They are extremely beneficial for the company but also provide fun creative outlets for the general public. How many times have you read a receipt asking for feedback without giving you any incentive to do so? Or how many times have customers tweeted feedback at companies, without the companies implementing that feedback in any way? Crowdsourced contests are a great way to create open, collaborative, beneficial conversations between companies and the general public, and can be leveraged by most companies in today’s world.

11 comments

  1. Awesome follow-up to our discussion in class on the sharing economy. I never thought about crowdsourced contests as an example of the sharing economy, but definitely is because of the way companies are essentially “renting” or “borrowing” the ideas of others without having to official employ them. Really, these contests are an ingenious idea because it doesn’t force the companies to constantly force creative ideas to be developed by their employees and it allows customers to feel included in company decisions.

    Crowdsourcing contests always remind me about the Netflix case that I have read in so many of my classes. The Netflix article below describes the Netflix prize rewarded to someone who could find the best algorithm to optimize their engine for search and recommendations; however, it failed because the implementation costs were too high and the gain was too low. They still paid out the prize money to the winner, but this is an example of the downfalls of crowdsourcing efforts from outside of the company: outsiders simply do not know about the internal aspects of the company, including what actual implementation costs, and what the actual gains are.

    http://www.forbes.com/sites/ryanholiday/2012/04/16/what-the-failed-1m-netflix-prize-tells-us-about-business-advice/

    I also am of the opinion that Lays is going to crazy with their release of flavors… chicken and waffle flavored, and ketchup flavored chips? How can this taste anything like the actual item? Maybe I need to give them a try… (This is why the weird flavors idea works)

  2. Awesome post, Faizan! I personally love the Lays contest, because it produced “Southern Biscuits and Gravy” potato chips, which are AMAZING.

    I like that you lay out the benefits of crowdsourced contests for companies, but if more companies adopted this model, would the benefits be diluted? I’m honestly not sure what I think. On one hand, if non-competitive companies run similar contests, both contests could produce great results. On the other hand, if competitive companies both run contests, firms have a new set of problems to consider.

  3. Great thoughts. I liked how you display the benefits to both the company and the general public. Crowdsourcing takes some of the marketing pressure off the organization and engages users to create products that they want to purchase. This model reminds me of Threadless, where users create designs that can then potentially be printed by the company. Since designs are consumer-created, it’s likely that demand will be higher.

    @nicolecasperbc brings up some great points about the failure of Netflix’s campaign. The key is to make low barriers to entry for user-generated content. If it’s easy to submit an idea, there will be a greater wealth of choices for the company. One caveat is that this also increases the potential for low-quality contributions.

  4. Great Post! I found many of these really interesting. I had only heard of the lays contest and never knew if it was truly real. I never really tried any of these chips and never really some them in the stores either, but i assume I just never really looked. Nonetheless, i think you make great points. What is interesting is that despite the prizes that these companies offer they always seem to be worth it when it comes to these projects. They also get free data as they can engage their customers and see exactly what they like and how they think. Just like @laurenwedell mentioned, one of the key things to look out for however is the big potential for low-quality contributions. I think crowdsourcing is key in terms of simple economics. You will always find someone who can better do something than yourself, and for this reason it is better to let them specialize in that while you specialize in something else. Moreover, taking ideas from the general crowd can be very beneficial in helping solve problems, and discover newer and better ways to doing things. Really interesting points and overall great post!

  5. Awesome post, Faiz! I’m a huge fan of crowdsourced contests, especially because they often culminate the best user-generated content that can be used for social media. When I worked at DreamWorks this summer, a good amount of our social media strategy integrated user-generated content to keep fans engaged with the brand and demonstrate their fervor for franchises such as How to Train Your Dragon. Thanks for sharing!

  6. I’m personally a huge fan of crowdsourcing for brand content. It’s a great tool for engaging with an audience and really making consumers feel like they have a hand in directing the company’s brand identity and strategy. User generated content also typically comes across as significantly more authentic and less sales-y than content that’s originally generated by the company itself. Both of these reasons are strong evidence than interacting with consumers to generate content, especially with digital campaigns that have a chance to go viral and drive marketing costs down, is a fantastic idea to get people talking about your brand.

  7. Crowdsourcing has definitely become one of the go-to tactics of marketers these days. You’ve already thoroughly explained the benefit of it, but one potential risk I would like to point out is that when brands involves the public on social media, they are also giving away part of the control – they better be sure that they have the capability to anticipate what could possibly go wrong and prepare contingency plan to do damage control. There were a few incidents I am aware of where crowd sourcing had gone wrong – most of them involving a large crowd of people up-voting vulgar or inappropriate names in naming poll/ contests. Brands didn’t notice the trend in time, the media picked it up and the whole thing became an embarrassment for the brand. Although people could always argue ” any publicity is good publicity” on these cases, the brands would probably be better off if they anticipated this and react timely. ( example : http://www.prdaily.com/Main/Articles/Crowdsourcing_gone_wrong_Mountain_Dew_effort_hijac_12402.aspx The Mountain Dew case )

  8. I love crowdsourcing. I think it’s one of the most tangible results that come from social media. Having a say in the flavor of chips, or a tshirt design creates a more personal attachment to both the brand and the good! I am much more likely to go out and seek a packet of lays that I voted on for the flavor, or that I saw online and thought they looked good. However, there is of course a high risk with crowd sourcing. Take for example the MBTA. They offered a poll of what the design for the new T carriages should look like, and are currently investigating internet ‘trolls’ for compromising the results of the survey. In this case, no one was harmed as a result nor were any customers dissatisfied but there can be instances where crowdsourcing can lead to poor results!

  9. Very interesting post. This was an enjoyable blog to read. i thought this was very easy to relate to because you can find a lot of these different Lays chips flavors at Lower Dining hall. I like that you lay out the benefits of crowdsourced contests for companies. I think crowdsourcing goes hand in hand with social media because of polls and surveys followers can take. I really enjoyed this post a lot. Very fun and informative read.

  10. Crowdsourcing contests have always been entertaining for me. However there are some hilarious examples of it going terribly wrong. The main one that comes to mind is I when Justin Bieber allowed people to vote on where his next major convert would be. When the polls closed, the top results were North Korea, Somalia and Antarctica. Sadly, JBiebs decided to ignore the results of the poll. Mountain Dew faced a similar problem once 4Chan began raiding their site and posting/upvoting incredibly crude suggestions that I don’t think would be kosher to mention here, but I’m sure you can find it with relative ease if you like. Lays is a great example of successful crowdsourcing. As a southern man, I’m a big fan of their Southern Biscuits and Gravy flavor. The other ones seem a bit off the wall and weird, but at the same time some of them are so strange I feel compelled to at least try it. Just the other day, I tried “Extreme Buffalo Ranch” Doritos simply because I thought it was so unique. Granted, it tasted awful and I would not recommend it.

  11. Like @jenniekang mentioned, crowdsourcing has definitely become a go-to for brands. It puts more power in consumer hands, makes their voices feel heard, and can uncover interesting insights brands may not have thought about. These contests can also revitalize brands. One cool example that came to mind is Quirky – an invention platform that connects inventors with companies that specialize in a specific product category and whose partners include General Electric, Mattel, and PepsiCo. Through the intense collaboration that takes place on the platform brands have been able to create unique new products, at lower costs. Great job!

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