User-Generated Content Business Model

User Generated Content Business Model

In this era, competition is the nature of any business. Every venture is trying to win customers and drive sales. However, this is not a simple affair. For your business to succeed, you must come a robust marketing strategy and business model that will attract customers. Your strategy should inspire and build trust among your target audience for them to take the desired steps.

With many brands promising heaven and delivering hell, it is becoming hard for customers to trust them. So, how can you change this equation? The answer is through applying the User-generated content (USG) business model. Keep reading to learn more about this model and how it works.

What is the User-Generated Content Business Model?

As the term suggests, the User-generated content model is a business model that involves creating content by the users. These users are not employees, partners, affiliates, or have links with the organization. User-generated content is information about a brand that originates from the customers rather than the company behind it.

The information can be in the form of reviews, blog comments, social media posts, videos, pictures, and testimonials. In other words, this model involves using current users to promote your products among other users. You do not pay or influence the existing users to do it. When your customers leave a comment about your services or write a review of your products, it will impact other customers buying decisions.

How Does User-Generated Content Business Model Work?

The User-generated content model’s role is to allow users to be marketers of your products to other potential users. As you know, modern customers do not trust what brands do or say about their products. Many believe that brands exaggerate their marketing and ads to win customers. The products on ads are different from the ones they offer in reality.

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For this reason, this model works by empowering the users to be your product promoters. The model involves a brand owner and users. The brand owner offers their products through an online platform. They then encourage customers to leave a review or share their views on social media platforms.

For instance, you can request them to share pictures and videos using your products or unboxing moments. Usually, the company comes up with a hashtag that the users can use when sharing their content on social platforms.

The next players in this model are the users. These customers enjoy your products or services. The users take a central stage in this model. They produce and share the content about their feelings on your products and services. These users are not part of your marketing team or paid to generate the content.

Hence, they play an indirect role in promoting your products for free. The USG business model works by allowing users to talk come up with content around your brands that will influence and enhance other customers’ purchase decisions.

Examples of User-Generated Content Business Model

With mistrust increasing on brand-generated content, many companies are turning to user-generated content models. Customers no longer trust the information that brands share about their products unless they hear the same from their fellow users. In this regard, the USG business model is becoming a popular gem. Some examples using this model include Coca-Cola.

Coca-Cola is a renowned soft-drink brand. Some years back, the company requested its customers to send images holding their favorite and personalized drinks. The company went on to make soda bottles with individualized photos and names. This aspect influenced many customers, as each wanted to have their name on their favorite taste.

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Starbuck is another company that employs this strategy.  Each year, Starbuck learns a promotion with the hashtag #RedCupContest. The company requests users to share images of their coffee for a chance of winning a gift card. Through the hashtag, the brand gains exposure and increased sales. Remember, the customers have to buy some coffee to take a photo and share it online.

Also, BMW uses the same approach to promote its product. This leading automotive brand has a Twitter hashtag dubbed #BMWRepost. Through it, they encourage the BMW owners to share their experience riding this car model. This way, BMW gains free marketing opportunity as the user keep on reposting. The list of businesses adopting the USG model is limitless

Pros and Cons

With users becoming the central players in the business, the USG model is now the new norm. Companies are focus on using customers as their unpaid brand ambassadors. While this model has varying advantages, it has its share of shortfalls. Here are some of them:

Pros

Enhance trust build

Trust in your brand is essential in driving sales. If customers cannot trust what you are offering, they will not buy it. Using the user-generated content model, you allow customers to speak to other customers about your products. As the users share experience, it inspires other potential buyers to trust and try your products. So, this concept is essential in enhancing customer trust in your brands.

Improve online visibility

As customers share information about your product with each other, your brand gain high visibility. For instance, when users share their photos using a hashtag, you gain and attract a broad audience. This aspect increases your online visibility and makes your brand popular.

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Cons

Possibility of negative content

As usual, not everyone will like your products. Some will talk ill about what you offer despite not being your customers.  When using this approach, it is inevitable to have negative content about your brand. Such content can have hurtful impacts and lead to loss of sales. For this reason, you need to embark on consistent monitoring and moderation of the content shared.

Conclusion

In a word, a User-generated content business model is an integral approach in enhancing customer trust and brand visibility. The approach enables you to cut on your marketing budgets. It is a perfect way of promoting your products. However, it is prone to negative content that can hurt your brand perception among the customers.  

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