One of the biggest challenges for entrepreneurs is to scale up their business, and to manage the growth by hiring more people in every function. But what if you could achieve growth by just letting your community of users do most of the work?

Several creative companies have used social media tools to get their customers involved in core aspects of their business, all the way from marketing to product design, product testing, and customer service.  Here are some great examples of organizations that are using social media to drive sales and efficiencies, while still connecting with customers:

Effective marketing using social media

By now, most people know that social media provides many tools for creating brand awareness, as well as for generating sales leads. Fiskars, a Finland-based manufacturer of scissors realized that scissors are very popular among scrapbookers, and set out to reach this community. After identifying four Fiskars users who were extremely passionate about the brand, the company set them up with a website and a blog, and made them consumer evangelists. The “Fiskateers” program has since then grown to more than 5,000 Fiskateers across 70 countries, each actively blogging and evangelizing the brand. Having so many “marketers” on its payroll would certainly have been unsustainable for the company, but by leveraging the power of its community, and using online tools like blogging, Fiskars has created a strong brand identity among its target audience.

Blogging isn’t for you?  Try Twitter to connect with your audience. Naked Pizza of New Orleans, which prides itself on making the “world’s healthiest pizza,” has latched onto Twitter as a means of promoting its fresh ingredients and offering promotional deals. Twitter has been so effective that they’re now using billboards to drive more people to the Twitter account. More and more restaurants are finding Twitter to be an effective way to boost their sales.

Finally, no discussion of social media marketing is complete without talking about viral videos. Blendtec, a division of the Utah-based K-TEC, manufactures high powered, durable, commercial blenders. In 2006, Marketing Director George Wright had the unenviable task of creating a brand campaign with a budget of $50. When Wright saw CEO Tom Dickson and some engineers testing the blenders with heavy duty chunks of wood, he hit upon an idea and used the $50 to buy the domain Since then, the “Will it Blend” series of videos has seen more than 80 million views on YouTube and increased Blendtec’s sales by more than 700 percent.

Involve customers in product design

How can you add value and create customer loyalty if you don’t even control your product design process? Threadless, an online T-shirt store operated by the Chicago-based skinnyCorp, has found the secret to that, selling more than a million T-shirts a year, none of which were designed by the staff. All the designs are submitted and evaluated by the community of users on its website. Hundreds of artists submit their designs, and users vote on them. Every week, the best designs are selected for printing, and the winning designers get $2,000 in cash, $500 in gift certificates, and another $500 for every reprint. According to some reports, the company generates more than $30 million in revenue and $10 million in profits.

Muji, a Japanese retailer, has latched onto a similar concept through its website, where it invites submissions for innovative furniture designs. Muji, which means “without brand,” has a community of half a million people who submit and evaluate designs.  Shortlisted designs are then sent to professional designers, who polish them before sending them off for production.

Web companies often launch products in a “beta” state and invite selected users to test the product. Joffrey’s Coffee & Tea Company took this idea and applied it to coffee. It invited bloggers to beta-test its coffee by sending them free samples. More than 1,500 bloggers participated, and generated enormous buzz for Joffrey’s on the Web. Based on feedback from these bloggers, Joffrey’s launched Coffee 2.0 with many “bug fixes and improvements.” Even the name Coffee 2.0 came from one of the beta testing bloggers. Not only did Joffrey’s use social media effectively to do product testing and improvements, but it also created enormous buzz around the product. 

Get customers to help with customer support

Customer support is one of the most difficult things to scale as the business grows. Consumers are increasingly logging on to social media sites to express their frustration with poor service. For example, the consumer complaint video “United Breaks Guitars ” has had close to 5 million views on YouTube.

Innovative companies are using social media in a couple of different ways to provide customer support. eBay has outsourced almost its entire customer support function to its users from its very beginnings. In his book The Perfect Store, Adam Cohen writes about eBay in 1996: “Omidyar did not have time to explain to each individual user how to write a listing in HTML, or to give advice on bidding strategy.” The solution was to launch a Bulletin Board where users could “gather, share information and ask for help.”  Later, eBay ended up hiring some of the people who were the most active and helpful on the forums to work for it, answering customer emails and providing additional support.

A different model of support treats social media as another channel for the in-house customer support team. Frank Eliason, Comcast director of digital care, has a following of more than 25,000 people on his “Comcast Cares” Twitter account, where he answers user questions. The real-time nature of Twitter and its search functionality allow Eliason to even reach out to Comcast users who haven’t actively sought help.

By applying a bit of imagination to social media tools like blogs, Twitter, Facebook, and YouTube, these forward-thinking companies have grown their businesses by leaps and bounds. Take cues from these examples of the power of community, and you’ll avoid some of the growth pains that arise from controlling and managing all of your business functions in-house.

Vijay Chittoor is the director of product management at Kosmix, an exploration engine that offers a 360 degree view of any topic on the Web.  A former McKinsey consultant, Vijay is a graduate of Harvard Business School and the Indian Institute of Technology, Bombay.  He shares his thoughts on technology at his blog.