User generated content (or UGC as it is called by acronym-loving marketers) has become one of the main trends in the industry. What UGC really means is that consumers are now in control of their own story. It is no longer a journey where companies are in the driver seat telling consumers where to go but rather a two-way communication in which the consumers decide where they want to go and how they want to get there.

In this new user-focused landscape, there are several different reasons why UGC is crucial for brands. The user-engagement methods may vary from industry to industry but the importance of UGC is the same for all of them.

It lets your brand develop its personality

One of the benefits of UGC is the fact that consumers can bring their own perspective of the product to the table. If a company has 100 customers it means that there are 100 different ways that people are experiencing the product. What better way to make things interesting than to let your customers share these experiences? This can really help a brand develop its own personality in the digital space.

It is measurable

As great as it is to generate valuable content, what ultimately matters is the results. The return on investment on UGC is completely measurable through social media analytics tools and Google Analytics so that businesses can tell what is working and what is not. It is the ideal way to drive revenue and demonstrate value by measuring the engagement.

Millennials like it

With e-commerce rapidly increasing in popularity among millennials, purchasing behaviour is naturally evolving with it. Millennials, otherwise known as Generation Y, are estimated to be the largest consumer group in the US history. According to market research reports by Ipsos and Crowdtap, a large percentage of millennials say that they use UGC to inform important purchasing decisions that they make.

As irrational as it may seem, nowadays customers are paying more attention to peer reviews than professional evaluations. In a landscape where 50% of the audience is using fellow consumers’ opinions to make decisions, it is impossible as a brand to ignore the significance of UGC.

It overcomes trust issues

These days, consumers have inherent trust issues against corporations. Every time we see an ad that says “free …” we are immediately suspicious. Consumers know that there is no such thing as free when it is coming from a company that is looking for ways to increase its bottom line.

This phenomenon was tested in a very interesting experiment by Ayelet Gneezy, Stephen Spiller and Dan Ariely, who set up a booth in a busy location with a large sign that read “Free Money”. All that passers-by needed to do was to stop, grab a $50 bill from the table and move on with their day. Despite the simplicity of it, only 19% of passers-by stopped to take the free money. The researchers concluded that consumers have become so cynical that they disengage as soon as something sounds too good to be true.

UGC is a huge step in mitigating this mistrust by letting the real users of a product do the talking for you. When the information is coming from the company itself, we immediately activate our cynicism and start questioning it. But when the claims come from other users just like us, we know that they have been through the same process that we are planning on going and they are telling us their first hand experience, which we perceive as a much more credible source of information.

It is psychologically proven

Social proof theory suggests that people are automatically drawn to things that they know others already like and trust. This goes hand in hand with building trust, as the more people are talking about a product (and hopefully saying good things), the better the chances of recruiting more customers. This works from both a consumer and a business perspective. When people don’t have enough information or are unsure of what to do, they turn to a larger group of people who have more knowledge than them. As for the companies, it is a great way to legitimize their claims about a product through actual users validating it for them.

Monitor and Engage

To be clear, UGC is not simply about asking your customers to write reviews for you. It is about engaging in the conversation and continuously monitoring the Internet to see what is being said about your brand.

In order to achieve this, companies need to know how their customers spend their time on the Internet. What social media sites do they regularly follow? What channels do they use to find information? Once these potential touch points are identified, it is easier to connect with the consumers at the right time with the information.