In October of 2006, Netflix announced that it would award $1 million to the contestant who could improve its movie recommendations by at least 10 percent. After receiving nearly 42,000 entries, the contest is on the verge of announcing its winner. This more accurate recommendation system will help the company deliver more on-demand movies and television shows, giving it a crucial advantage over the competition.

The genius behind this contest is crowdsourcing, or asking others for help (often for no compensation) via the Internet. Your small business can use this tactic to expand your talent pool while gaining deeper insight into what customers want.
Here are a few ways you can outsource innovation:

• Blogs – if your company has a blog, you can use it to ask readers for input.
  • Example: Southwest employees share their stories and communicate directly with customers through the “Nuts About Southwest” blog.
• LinkedIn – you can use their “Answers” section on this site to ask users questions.
  • Example: Chad Moutray uses this feature on a regular basis, and got over a thousand answers when he asked “What measures should small businesses take to weather this economic downturn?” (yes, this is an unusually high number).
• Online Forums – reach out to your community by participating in forum discussions and soliciting innovative new ideas.
  • Example: Cambrian House has over 50,000 members in its forums and more than 7,000 ideas from the crowd.
• Twitter – it started as a service that asks one simple question: what are you doing? Now, its popularity can help you drive your small business by engaging viewers with your simple questions.
  • Example: Chris Brogan asked Twitter for ideas on a social media project for Oreo. In a matter of minutes, people responded with answers.
• Facebook – you can create a page, share a link, add an application and start a conversation with other Facebook users.
  • Example: Target’s “Bullseye Gives” campaign is going to give $3 million per week for next few weeks to charities chosen by their fans on Facebook. To learn more about it, click here

Clearly, the Internet is a powerful marketing vehicle. How are you using it to drive your business?