Crowd Pulling

May 31, 2011

Tuangou: a Chinese word that means Team Buying.

It essentially refers to individuals combining the power of the internet with the collective power of a group (vis-a-vis an individual) to compare and bargain better prices for a product or service for the benefit of at group. You would probably also know this concept by other names such as Crowd Buying, Group Buying, Group Bartering, Store Mobbing, Mob and Save and so on.

It is the same basic concept around which websites such as Groupon, dailydeals and livingsocial are modeled.

When brick-and-mortar companies first went online, they offered better prices to the online customer by saving on the cost of retailing. And now that the online storefronts are well established, retailers and consumers have devised another win-win situation for themselves – better price deals for a larger crowd. Retailers encourage buyers to mob them for better prices and buyers are happy to spread the word about a deal in their social network, for the sake of a better price (usually).

Typically, crowd buying works when the product has a mass market appeal, like consumer electronics, airline tickets, spa vouchers, tickets to a concert and so on but, when a product or service has a niche market or a luxury appeal, then attempting to pull a crowd for a better price might be futile and even damaging to its brand. Also, there are many products and services that buyers would like to consume and possess in exclusivity.

In such cases, can’t Tuangou be extended or varied by involving a crowd in a different stage of the business? By that I mean, instead of rewarding crowd buying with better price, why aren’t crowds used for inputs on product/service features, product/service distribution or even product/service testing before launch? Besides just wanting a better price deal, another innate nature in people is to be the first to try/test drive a product/service in a social/peer group and later ‘recommend’ it to that group – why is that not tapped in a mass market scale?

I know many businesses are already doing this by way of online interactions with their users, consumers and potential customers in Social Media circles, but the missing punch is a ‘reward’ for the crowd. In Groupon and dailydeals, the reward is a discounted price, likewise there must be carrot at the end of the stick for pulling a crowd that will help the business. The reward doesn’t have to be monetary, I guess. Even recognition could be a way of reward. For example, waiving product shipping costs for a crowd that helped test a product could be a reward too. On a completely different line of thought, a badge-of-honor or a certificate-of-contribution to individual members in a crowd for their effort or contribution could be effective, especially if it can be linked to their Social Media Networks (where their peers get to see it). This could motivate people to mobilize potential contributors from their network.

A business might be able to source collective expertise and more evangelists this way. But the important challenge would be to find a reward suitable for a targeted crowd of people.

Just thinking aloud…

And more thinking and rambling and musing coming up in my personal blog.

So stay…

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