People jumble up the terms ‘outsourcing’ and ‘crowdsourcing’, outsourcing is contracting tasks to a single vendor or a small team, whereas crowdsourcing is working with a community of people or a large team of vendors. With crowdsourcing gaining so much popularity in the online business world, entrepreneurs, small businesses and even big ones are using this medium to escape from agencies and to get closer to their customers.
For some crowdsourcing brings new creative ideas, while others find it to be simply inefficient. Before contracting a project or task through a crowdsourcing platform, you should weigh the pros and cons.
- Cost Savings
One of the major reasons businesses are attracted to crowdsource, especially entrepreneurs, is because it saves up money. Hiring a new person for the job or setting up a department costs considerably more than posting a task or project on a crowdsourcing platform. With the right incentives people will get motivated to produce work of the quality you desire and it will cost you way less than hiring an agency to do the job.
- More Creative Ideas
According to me this is biggest advantage of crowdsourcing. You get more interesting ideas from people who are also your customers, so you benefit from their viewpoint of your business. Ideas from a community of people, rather than a single person or team, provide you with more options.
- No Agency Issues
Agencies are not always successful in convincing the client that they have given their 100 percent to produce prospective ideas. By crowdsourcing, the client doesn’t have to go through the hassle of working with arrogant agencies and settle for unsatisfactory work by them.
- Excellent Marketing Tool
In order to market your product/service successfully you need to catch the eyeball of your target audience. Why do you think LG crowdsourced? To get the people talking of course! Crowdsourcing creates a buzz even before the product is out in the market.
- Readily Available Resources
Another plus is that you don’t have to waste your energy in recruitment activities. The talent comes to you on one platform and you can then decide which individual is best suited to work for you in the future.
- Credibility Issues
Your customers and your competitors get to know what you aim to achieve through a posted task or project. You can’t rely on the people to produce original and unique ideas always. Plagiarized work is often submitted and if you are unaware of this when you select a copied idea/work then legal issues can arise.
- The Risk Factor
There are a number of risks you have to take if you decide to crowdsource. Like I already mentioned there is the reliability issue, then there is the risk of spending money but not ending up with an idea worth using. The participants don’t know about your business model and may submit entries which deviate from it. Legal risks are also involved.
- Management Cost
When you crowdsource your work that means you have to spend time and money to deal with the participants directly as you’ll have to go through the submitted ideas all by yourself. This clears the common misconception that crowdsourcing incurs zero costs.
- Negative Marketing
Where crowdsourcing is an excellent marketing tool, it can contribute to negative marketing as well. When you ask for ideas that means you welcome ideas which can actually hurt your marketing campaign. Despite taking all the necessary steps to set your campaign in the right direction if it takes the other course then pull the plug immediately!
You can discover fresh talent through crowdsourcing but there is a possibility you might hurt your business too. Consider these pros and cons before you crowdsource a project next time.