What Is Crowdsourcing? Definition, Types And Benefits

Indeed Editorial Team

Updated 5 December 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Crowdsourcing is a practice that helps companies effectively use resources and time. It aims to resolve issues through the help of a wider unidentified audience. Learning about crowdsourcing and its benefits may help you understand if it is a suitable strategy to implement for your project. In this article, we discuss what is crowdsourcing, its process, various types and benefits.

What Is Crowdsourcing?

To answer "What is crowdsourcing?", it is imperative to acknowledge that businesses have several issues that may sometimes be beyond their scope to resolve. Crowdsourcing is a practice that seeks knowledge, value, goods or services from a crowd with skills suited for the aim of the project. The crowd often works on a voluntary or paid basis. The companies invite participants irrespective of their educational experience or background. The objective of any crowdsourcing project is to use the wisdom of a large group to achieve a common goal. The practice helps organisations collect new insights, gain monetary value, create a new product, streamline intricate processes or generate marketing content.

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How Does Crowdsourcing Work?

Crowdsourcing aims to delegate a task amongst an unidentified group of people. Here are a few steps a company may follow to crowdsource a project or task:

1. Define the objective

It is essential to define the objective of the crowdsourcing activity. Companies may crowdsource data collection, marketing research or even develop a new product. Defining the tasks and objectives helps streamline the process and increase its efficiency. The company sets up systems to track and monitor the inflow of crowdsourced work.

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2. Identify the crowd to source it

In crowdsourcing, the people identified for the work are unaware of the tasks performed by other members. Companies use several digital spaces such as social media platforms, dedicated crowdsourcing platforms and even their website to increase awareness about their requirement and encourage the audience to take part. Several industry-specific micro-labour sites attract individuals with specialised skills. Companies with clearly defined crowdsourcing objectives may use these platforms to complete tasks or resolve issues.

3. Delegate the microtasks

Once an organisation identifies their audience to crowdsource the work, they assign the project or micro-tasks. The company monitors the delegated tasks. They check the quality and use the insights derived from the activity to make business decisions.

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Types Of Crowdsourcing

Crowdsourcing may occur at various levels in a business. Here are some types of crowdsourcing:

Solution-focused crowdsourcing

A company may often crowdsource to solve a complex problem. They may seek solutions from specialised groups or micro-labour sites. Anyone from around the globe may attempt to resolve the issue. Sometimes, it starts a conversation on the internet and several people get involved to find a solution. An advantage of such crowdsourcing is that it helps find an expert to fix the issue. Additionally, the company spends very little resources to use the knowledge of a crowd.

For example, a company trying to find a sustainable solution to apparel packaging may ask a crowd through social media or other channels for solutions. Similarly, a company unable to resolve a coding issue on their website or application may share the code snippet on a platform like GitHub to solve it.

Crowdsourcing for content

Brands often use crowdsourcing as a method to engage their audience. They use the creativity of their audience to create a new logo, packaging design or even create content for social media. The brand may or may not provide an incentive to the audience. The content made by people may go through quality checks to match the brand guidelines before being used.

For example, a food and beverage company introducing a new line of products may use social media to encourage its audience to design the packaging for the product. The company may incentivise the process by offering a cash price to ensure maximum participation.

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Crowd voting

To improve products, companies often gain feedback from their customers. It may be through emails, flyers or surveys. Many companies set up businesses that run solely on user opinions. User experiences shared on websites help other users make informed decisions or form opinions about a product or service.

Software crowdsourcing

Software crowdsourcing is a process where a company involves people in all stages of software development, including documentation, design, coding and testing. Companies may organise competitions to encourage participation. Some may use this as an opportunity to speed the development process or even recruit new talent.

Crowdsourcing for product testing

Product testing is a crowdsourcing type that helps collect audience feedback before the official launch. It helps companies identify bugs in usability and understand how well a product may get accepted in the market. Many companies that develop mobile applications may release a beta version to a restricted crowd to test it. Similarly, companies may examine a product in specific locations like schools, corporate offices or even specific residential areas.

Crowdsourcing for customer support

Companies open moderated forums or groups to address customer queries. It provides a platform for anyone to write a question and answer them. Companies address all customer queries without spending too many hours. Subject matter experts or brand advocates often answer the queries in such forums, and companies may validate it.

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Crowdfunding is a type of crowdsourcing that focuses on raising funds. Startups with a product prototype or non-profit organisations seeking funds for their cause often use crowdfunding to raise money. The process collects small amounts of money from people to serve a cause.

For example, Kickstarter is a dedicated crowdfunding platform for startups to raise funds for their products. Similarly, Ketto helps raise funds for those who cannot afford healthcare expenses.

Implicit crowdsourcing

Implicit crowdsourcing happens when users unknowingly contribute towards a cause. Companies collect data that benefits a different cause. For example, search engines use small image-based puzzles to improve their image search results. They may track user location to improve the global positioning system (GPS) used during navigation. Data collected in this method is popular in machine learning applications to improve efficiency.

Benefits Of Crowdsourcing

Crowdsourcing helps corporations solve problems and gain new perspectives. It builds a community of contributors, increases brand engagement and helps businesses make informed decisions. There are several other benefits to crowdsourcing, including:

Increased diversity

By inviting a broad audience to take part in problem-solving, an organisation gains varied perspectives, knowledge, experience and expertise. It helps take a holistic approach to the problem and devise a solution. With smaller companies, crowdsourcing is an effective method to gain access to people from different backgrounds. It compensates for the lack of expertise or diversity in the company.

Reduced costs

Crowdsourcing is a lucrative option for companies to collect data or perform specialised tasks. Companies do not hire people but provide a one-time reward to people in the crowdsourcing activity. The amount paid is meagre compared to the costs saved by the company on recruiting and hiring. When companies seek an audience to participate in contests or social media campaigns, crowdsourcing may be unpaid.

Increased brand engagement

Brands release marketing campaigns to increase brand engagement in a crowdsourcing activity. They make the process competitive to encourage participation. It helps increase brand recall, brand engagement and attracts fans. The audience may view this as an opportunity to associate with a brand and gain recognition.

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Faster problem solving

Crowdsourcing enables companies to access the best ideas from across the country or globe. The process is quick, and companies can set their deadlines to receive the ideas. Instead of relying on their internal talent, companies use an audience to resolve their issues. The audience often includes brand advocates and fans who relate to the brand or the cause. It is beneficial when organisations work within strict deadlines to resolve an issue or complete a project, especially in healthcare, disaster management or even software malfunction.

Collect customer data

Crowdsourcing is a method to collect customer data and increase brand reach. The audience submits their information to the company. It helps businesses understand the audience demographic that interacts with the brand, the suitable communication channels and deeper behavioural insights. Companies may run multiple crowdsourcing campaigns to understand the incentives that help improve customer interactions.

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Retain control

While crowdsourcing raises concerns over intellectual property rights and confidentiality, it is a process that allows companies to retain as much control as they wish. Companies define the extent of information they disclose to their audience. Organisations monitor the results and select the participation that suits them. They retain complete control over the process and the quality of the final product produced.

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Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.

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