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The Power of User Generated Content: Transforming SMB Marketing Efforts

Updated: Feb 1


Power of User Generated Content

Modern marketing strategies have evolved beyond the reliance on celebrity endorsements, favoring more authentic and relatable approaches to connect with audiences. Reports claim that 75% of customers don’t believe or trust branded ads anymore. So, why spend money creating them if they are not attracting any customers?


As a brand manager or digital marketing manager, you can instead focus your efforts on user generated content (UGC) that is yielding up to 4.5% higher conversion rates, given a whopping 92% of consumers believe recommendations if they come from friends or family, claims the same report


Even if you are a small or medium sized business owner, UGC will benefit you greatly. All you need to do is repurpose the content your customers are sharing about you. This content can be reviews, testimonials, unboxing videos, or even a picture of them using your product or service. 


However, as easy as it may sound, you need to ensure you are reusing the content the right way, that is, requesting consent, filtering out spam or harsh comments, and showing a perfect blend of good and bad experiences. 


To ensure you leverage social proof in the most effective way, this article will unpack everything that you need to know about UGC. We will also learn to tackle common UGC challenges and find inspiration in the most trending UGC

campaigns. 


Table of Content


  1. Understanding the basics of user generated

  2. What is user generated Content (UGC)?

  3. 5 popular types of UGC currently trending

  4. 7 ways UGC impacts small and medium-sized businesses (SMBs)

    1. UGC is cost-effective

    2. UGC builds authenticity and trust

    3. UGC boosts engagement

    4. UGC provides customer insights

    5. UGC acts as a social proof

    6. UGC increases reach and brand awareness

    7. UGC spikes conversion

  5. Leveraging UGC for successful SMB marketing

    1. 7 steps to create an effective UGC strategy for SMBs

    2. Metrics to track the impact of the UGC campaign

    3. Tools and technologies to invest in for effective UGC management

  6. 3 most common UGC challenges and their solutions

    1. Small customer base

    2. Quality control

    3. Obtaining permissions

  7. 3 businesses running UGC campaigns the right way

    1. Ikea’s #IKEALifeAtHome

    2. Blur’s micro influencer marketing

    3. Spotify’s #YearlyWrapped

  8. Common question that people ask about UGC for SMBs

    1. Is user generated content costly?

    2. What are the best practices for moderating UGC?

    3. How can SMBs encourage customers to generate content?

    4. Is it okay to use UGC in our brand marketing?

    5. Do I need to ask permission to use user generated Content?

    6. How do I get rights to use UGC?

      1. Leverage UGC as a small and mid-sized business and save 💸💸



Understanding the basics of user generated


Before understanding the importance of user generated content for small and medium sized businesses, let us understand the meaning and type of UGC.


What is user generated Content (UGC)?


Gartner defines user generated content as: original, brand-related content — including text, video, images, podcasts, etc. — that is created and published online by customers and brand advocates, as opposed to employees or official representatives of that brand.


In other words: User generated content is created by the users of a particular product or service, rather than brands or companies who create promotional advertisements or videos. UGC is often shared on social media platforms and websites; Instagram, TikTok, and Twitter being the most popular choice as per the report.


5 popular types of UGC currently trending


While there is a wide range of user generated content types, here are the six most trending UGC types:


  1. Social media mentions: One of the most recognized forms of UGC, where users share their experiences with products or brands on social media, often without directly promoting them. This type of content is more about sharing personal experiences than explicit endorsements.

  2. Written reviews and testimonials: Online reviews and testimonials remain highly influential. A vast majority of online shoppers read reviews before making a purchase, underscoring the importance of this type of UGC in influencing buying decisions.

  3. Audio and video testimonials: Incorporating user-generated video content, such as testimonials or reviews, provides social proof and can create a deeper emotional connection with potential customers.

  4. Micro-influencers: In 2024, micro-influencers, known for their smaller but highly engaged audiences, are expected to become more influential in the UGC space. Brands are increasingly collaborating with these influencers to reach specific demographics in an authentic manner.

  5. Ephemeral content: Content like disappearing stories on platforms like Snapchat and Instagram continues to grow in popularity. Brands leverage this to create a sense of urgency and exclusivity.


7 Compelling ways in which UGC impacts small and medium-sized businesses (SMBs)


User generated content offers authenticity, which today’s trending GenAI-created content lacks. It also frees SMBs from the constraints of their limited marketing budgets. Let us see in detail below :- 


1. UGC is cost-effective


As an owner of a small or medium-sized business, you'll find user generated content incredibly cost-effective. Since UGC leverages content created by your customers, it reduces the need for extensive advertising budgets on your end. 


For example, if your business sells eco-friendly products, sharing customer photos and reviews of your products in use demonstrates real-world satisfaction and environmental impact, enhancing your brand's credibility and appeal without incurring significant expenses.

This grassroots approach can lead to increased engagement and sales, making

UGC a smart investment for your business.


2. UGC builds authenticity and trust


User generated content builds authenticity and trust for your small or medium-sized business by showcasing real customer experiences. This genuine content, created by actual users, resonates more with potential customers than traditional advertising, leading to increased trust in your brand.


For instance, if your business sells handmade crafts, featuring customer photos and stories of how they use your products in their homes adds a layer of credibility and relatability that traditional marketing can't match.

UGC demonstrates the real-world value and satisfaction your products offer, which can encourage others to make a purchase​.


3. UGC boosts engagement


An authentic and relatable online presence boosts engagement for SMBs. Customer reviews, social media posts, and testimonials are seen as more trustworthy and genuine than polished corporate content. This authenticity leads to increased trust and credibility among potential customers. Sharing and interacting with UGC enhances overall engagement rates, fostering a more active social media community. 


For example, if a customer posts a photo on social media using your product and tags your brand, it not only showcases real-life use but also prompts others in their network to engage with your brand. 


Additionally, UGC fosters a sense of community, as customers feel more invested and a part of your brand's journey. This is reflected in increased likes, shares, and comments, contributing to a more vibrant online presence.


4. UGC provides customer insights


All the reviews and comments that customers leave and the social media posts they create are a window into understanding customer preferences and behavior for your business. This content acts like a continuous focus group, providing real-time feedback and authentic opinions from consumers. By analyzing UGC, you can spot trends, adjust strategies, and better meet consumer needs. 


For example, a local coffee shop might notice that customers frequently post about their love for a particular seasonal flavor on social media, prompting the shop to make it a permanent offering. 


This level of insight, gleaned from UGC, can guide product development, marketing strategies, and overall customer engagement. Using UGC marketing platform, you can monitor mentions, hashtags, and keywords related to your brand, providing a quantitative view of customer sentiment and behavior.


5. UGC acts as a social proof


Leveraging user generated content is one of the best ways to create social proof for your SMB. Customer reviews, images, unboxing videos, and social media posts are first-hand user experiences with your products or services. This type of content showcases consumer satisfaction authentically, influencing the purchasing decisions of potential customers.


For instance, a customer's positive review or a social media post about their favorable experience with your product can persuade others to try it, thereby boosting your brand's credibility and trustworthiness. 


Such endorsements are particularly effective because they come from fellow consumers rather than the brand itself, making them more relatable and trustworthy. 


6. UGC increases reach and brand awareness


When customers share their experiences with your brand on social media, blogs, or other platforms, your SMB’s reach and brand awareness automatically increase as those posts expose your brand to the creators’ followers. This amplifies your brand’s visibility far beyond your existing audience. 


For example, if each of your customers shares their positive experiences with a hundred followers, it can exponentially increase your brand's exposure. 

By running campaigns that encourage UGC, like contests or branded hashtags, you can motivate customers to generate content, thereby extending your brand's reach and strengthening customer loyalty​.


7. UGC spikes conversion 


When customers see UGC, such as reviews and testimonials, they view it as more credible and trustworthy than traditional marketing content. This authenticity encourages potential buyers to make a purchase. 


For instance, PowerReviews found that there is an 85.7% lift in conversion among visitors who click to see one-star reviews, demonstrating that even negative reviews can aid in informed decision-making. Additionally, interactions with Q&A sections on product pages show a 194.2% lift in conversion, and simply displaying UGC can result in a conversion lift. 


These figures highlight the impact of UGC in guiding customers through their purchasing journey, making them more likely to convert. Brands that incorporate user-generated product photos see an increase in conversions compared to those using professional photos, emphasizing the power of authenticity​​​​​​.


Leveraging UGC for successful SMB marketing


All the above-listed benefits might make you want to add UGC to your marketing strategy right away, but you have to be careful with it. Take a thoroughly thought-about approach to ensure you reap the benefits. 


7 steps to create an effective UGC marketing strategy


Step 1: Define your needs


Start by determining the objectives and goals of implementing a UGC campaign. Ask yourself why you're utilizing UGC - is it to enhance brand awareness, gather customer feedback, introduce new products, or run special promotions? This clarity helps tailor your UGC strategy to effectively meet your specific business goals.


Step 2: Pick the right social media platform


Different social media platforms cater to varied content styles and audiences. You need to understand where your target audience is most active and what type of content they engage with. For instance, Instagram is ideal for high-quality images and stories, while TikTok suits video challenges. Selecting the platform that aligns with your audience's preferences and your content type maximizes your UGC campaign's effectiveness​.


Step 3: Clearly communicate your intent to your audience


Be transparent with your audience about the type of UGC you are seeking, be it images, videos, or text. This ensures that the UGC aligns with your campaign goals. Provide guidelines and expectations upfront, so your audience knows exactly what to create and share. This clarity not only saves time but also leads to more relevant and effective UGC for your campaign​​​​.


Step 4: Leverage hashtags to promote your UGC


Create unique hashtags related to your brand or campaign. When your audience uses these hashtags in their posts, it not only increases the visibility of their content but also groups all related UGC together. This method effectively broadens your reach and enhances engagement with your brand on social media platforms​​​​.


Step 5: Foster community building


Create a space where your audience can interact and share experiences. It's about nurturing a sense of belonging and engagement around your brand. Encourage discussions, respond to comments, and share user content to make your audience feel valued and part of a community. This approach not only enhances brand loyalty but also encourages more UGC creation as users feel connected and heard​​​​.


Step 6: Prepare and moderate content at scale


As your UGC campaign grows, you'll need strategies to manage and filter this content to maintain brand consistency and quality. This involves editing, aligning UGC with your brand's voice and standards, and ensuring it's appropriate for your audience. Efficient moderation at scale is crucial to maintain the integrity and effectiveness of your UGC strategy​​​​.


Step 7: Monitor performance


Track and analyze the success of your UGC campaign. Regularly assess how the user-generated content is influencing your brand's engagement, reach, and conversion rates. Use various metrics to understand this impact. This step helps you understand what's working and what isn't, allowing you to make data-driven decisions to refine and improve your UGC strategy for better results​​​​.


Remember, each business is different, so it's important to tailor these steps to your specific needs and audience.


Metrics to track the impact of the UGC campaign


When you choose to monitor the performance of your UGC campaigns, these are the metrics you want to track:


  • Engagement rate: This includes likes, shares, comments, and other forms of interactions. High engagement rates usually indicate that the content resonates well with your audience.


  • Reach and impressions: These metrics show how far your UGC has spread and how many people have seen it. They're essential for understanding the campaign's visibility.


  • Conversion rate: This measures how many users took a desired action (like making a purchase or signing up for a newsletter) after interacting with the UGC. It's a direct indicator of the campaign's impact on your business goals.


  • User participation rate: In campaigns where you ask users to contribute content, tracking the number of participants can provide insights into how engaging and motivating your campaign is.


  • Sentiment analysis: Analyzing the sentiment of the comments and feedback can give you qualitative data about how your audience perceives the UGC.


  • Traffic to landing page: If UGC is used to drive traffic to specific web pages, monitoring the traffic and behavior on these pages can reveal the effectiveness of the UGC in driving desired actions.


  • Increase in followers or subscribers: A successful UGC campaign can lead to an increase in social media followers or email subscribers, indicating growing brand interest.


Tools and technologies to invest in for effective UGC management


Consider investing in some tools that will help you curate, organize, and monitor UGC. Here are some examples:


  • Social media aggregators: These tools collect and curate content from various social media platforms. They are useful for compiling UGC posts, images, or videos shared on different channels.


  • Content moderation tools: These are essential for filtering and managing the quality of UGC. They help in ensuring that the content aligns with brand values and community guidelines.


  • Rights management tools: For using UGC legally, rights management tools are crucial. They assist in obtaining necessary permissions from content creators for repurposing their content.


  • Analytics and performance tracking tools: To measure the impact of UGC on your marketing efforts, these tools provide insights into engagement, reach, and conversion rates.


  • UGC campaign management platforms: Comprehensive platforms that offer end-to-end management of UGC campaigns, including collection, moderation, publication, and analysis.


3 most common UGC challenges and their solutions


Managing user generated content comes with its own set of challenges that you need to navigate effectively. Here are the top three challenges that you need to prepare for in advance:


1. Small customer base


Small and mid sized businesses often have a small customer base that impacts user generated content (UGC) strategies. With fewer customers, there's a smaller pool of people who can create and share content about your products or services, leading to less frequent and diverse UGC. This can affect the effectiveness of UGC in your marketing and customer engagement efforts.


Solution: To overcome this, you should actively seek customer reviews and feedback. Encourage them at the point of purchase or through confirmation emails. Utilize social media campaigns, asking customers to post pictures of your products using specific hashtags. You can even incentivize this participation through contests or rewards, turning customers into advertisers and increasing the volume and diversity of UGC for your business​​.


2. Quality control


Controlling the quality of content your customers generate using your products and services can be quite challenging. With a vast array of content being uploaded by different users, ensuring that each piece aligns with your brand's message and maintains a high quality is a complicated task. This is because UGC varies greatly in style, quality, and relevance, making it difficult to consistently represent your brand well.


Solution: To ensure you get good quality UGC, set clear guidelines for what constitutes acceptable UGC. This might include setting standards for image quality, appropriate language, and relevance to your brand. Additionally, employing a combination of automated software and human moderation can help manage the influx of UGC. It's crucial to embrace both positive and negative UGC to maintain authenticity but always verify its legitimacy, especially in the case of negative reviews, to avoid misinformation.  


3. Obtaining permissions


Obtaining permissions refers to getting consent from content creators to use their UGC in your marketing efforts. This can be done through direct requests via comments or messages, or by establishing specific terms and conditions on your platforms. However, even if users publicly post content with your brand's hashtags, it's not safe to assume implicit consent for use. Always clarify the terms and make sure users are aware of them.


Solution: To streamline the process, consider using UGC rights management tools that offer automated processes for requesting content rights. These tools help in efficiently managing the permissions process and ensuring compliance with legal and ethical standards. They also provide features like consent forms, content license agreements, and rights tracking, making it easier to organize and use UGC in various marketing channels. 


3 businesses running UGC campaigns the right way


1. Ikea’s #IKEALifeAtHome


IKEA's #IKEALifeAtHome campaign encourages people to share their experiences of making the most of their time at home using the hashtag #IKEALifeAtHome and tagging @ikea.india. Participants have the opportunity to get featured on IKEA's Instagram page. 


In this campaign, the brand has introduced a specific hashtag for users to tag their home experience videos. They've made it clear that videos tagged with this hashtag may be featured on IKEA's official account. This approach allows IKEA to source diverse content directly from its users, without worrying about consent and offering them a chance to be showcased on the brand's platform.


Ikea’s #IKEALifeAtHome

Ikea sharing a user’s product video on its official Instagram handle (Source)


2. Blur’s micro influencer marketing 


Blur India, a cosmetic brand, has gained attention on social media platforms, particularly Instagram, with its range of beauty products. It involves influencers to review their products, which contributes to the brand's appeal. 


Leveraging several influencers with unique identities, Blur is reaching its audiences. Influencers provide genuine reviews and authentic content, building trust among potential customers. Additionally, Blur collects user reviews and displays them on its official website, eCommerce websites, and social accounts.



Blur’s micro influencer marketing

Blur India leveraging influencer marketing (Source)


3. Spotify’s #YearlyWrapped


Spotify's #YearlyWrapped campaign is a viral marketing strategy that showcases personalized summaries of users' listening habits over the year. The campaign includes features like "Your Listening Personality," "Your Artist Revealed," and "Your Top Songs and Genres." It provides engaging insights like total listening time, favorite genres, and personalized messages from artists. 


The campaign promotes social sharing and community engagement as users share their music preferences on social media, contributing to its popularity. This personal touch enhances user experience and loyalty, making Spotify Wrapped a highly anticipated event each year.


Spotify’s #YearlyWrapped

Spotify Wrapped 2023 login page (Source)


Common question that people ask about UGC for SMBs


Is user generated content costly?


User generated content is generally cost-effective compared to traditional content creation. It relies on content produced by customers or followers, typically requiring minimal investment. However, costs can arise from managing campaigns, moderating content, or incentivizing participation. Overall, UGC offers a budget-friendly way to generate authentic, engaging content, especially for businesses with active online communities​​​​​​.


What are the best practices for moderating UGC?


Best practices for moderating user generated content include establishing clear guidelines for acceptable content, actively monitoring submissions, using a combination of automated tools and human review for moderation, ensuring legal compliance (particularly with copyright laws), and maintaining open communication with your audience. It's also important to respect users' privacy and handle negative or inappropriate content swiftly and effectively​​​​​​.


How can SMBs encourage customers to generate content?


Small and medium-sized businesses (SMBs) can encourage customer generated content by hosting social media contests, offering incentives like discounts or features on their platforms, creating hashtag campaigns for easy content aggregation, and actively engaging with customers online to build a community. Personalizing the customer experience and showcasing existing UGC can also motivate more customers to share their experiences​​​​​​.


Is it okay to use UGC in our brand marketing?


Yes, it is okay to use user-generated content (UGC) in your brand marketing, but it's crucial to obtain explicit permission from the content creators before use. This respects their intellectual property and avoids legal issues. UGC can be a powerful tool for authentic marketing, building customer trust, and enhancing brand visibility. Always ensure that the UGC aligns with your brand values and messaging strategy​​​​​​.


Do I need to ask permission to use user generated Content?


Yes, you do need to ask permission to use user-generated content (UGC). Obtaining explicit consent from the content creators is necessary to respect their intellectual property rights and to avoid legal complications. This process includes seeking approval directly, often in writing, and ensuring the content aligns with your brand's use case and image. Permission ensures ethical use and maintains the trust of both creators and your audience​​​​​​.


How do I get rights to use UGC?


To get the rights to use user-generated content (UGC), you should directly request permission from the content creators, typically in writing. This can be done through messages, comments, or email campaigns. Establishing specific terms and conditions on your platforms can also help, where providing content implies consent to its use. Additionally, using UGC rights management tools can streamline the process, allowing for easy tracking and management of consent forms and content license agreements. It's essential to ensure that the process is clear, respectful, and compliant with legal standards​​​​​​.


Leverage UGC as a small and mid-sized business and save 💸💸


User generated content has been proven to be a cost-effective marketing strategy for brands. UGC allows for organic storytelling and word-of-mouth marketing, which is often more relatable and accessible to the average consumer. This approach significantly reduces marketing costs compared to traditional digital marketing and influencer marketing tactics. 


You can start by implementing social media aggregator tools that will help you collect UGC, organize them, and post them on your preferred channel; be it your website, social accounts, or eCommerce pages. These tools will also help you request consent from content creators, protecting you against any legal complications. 




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