Competitive crowdsourcing contests, where customers can submit new product ideas and win prizes if their idea is chosen as the winner, have been gaining popularity among consumer goods firms. Through crowdsourcing, companies can outsource idea generation, tapping into the collective creativity of their user base to generate innovative ideas, and by framing it as a contest, they can attract a higher number of participants.

Although entering such a crowdsourcing contest might sound tempting, WU marketing researchers argue that the more likely outcome - not being the one winner among thousands of entries and therefore losing such a competition - leads to negative consequences among participants.
In fact, the authors have demonstrated through multiple lab and field studies that participating in a crowdsourcing contest without winning it can backfire. It leads consumers to temporarily disengage from the brand, resulting in negative word-of-mouth and short-term purchase behavior. This is primarily due to the negative affect and the perceived lack of contribution experienced by non-winners.

To address this adverse effect, the authors tested an intervention aimed at reframing the crowdsourcing effort as a community activity rather than a competition. This reframing approach successfully alleviated the negative impact of losing a crowdsourcing competition on participating consumers.

To read more about this research, check out the following paper in the Journal of Interactive Marketing: 
Karpukhina, T., Schreier, M., Janiszewski, C., & Nishikawa, H. (2023). I Didn’t Win! An Overlooked Downside of Crowdsourcing? Journal of Interactive Marketing, 0(0). https://doi.org/10.1177/10949968231184417