13 Surefire Steps to Crowdfunding Success
A year ago, I listed 13 reasons why crowdfunding fails are so common these days. According to Nermin Hajdarbegovic, it all boils down to “everyone wanting a sweet slice of the crowdfunded pie, but nobody wanting a single crumb of responsibility.” So, how can we stop crowdfunding fails and encourage crowdfunding success? Using articles by Marisa Sanfilippo, Michael Hughes, and Christopher Moore, I have compiled a list of 13 steps to crowdfunding success.
Steps to crowdfunding success – No. 1: choose your platform wisely
The success of your project depends on the supporters you can find on your chosen platform. Have similar projects been successfully funded on that platform? Hence, do thorough research and find a platform that suits the needs of your project and your brand.
Steps to crowdfunding success – No. 2: know your numbers
Get your key numbers straight before launching any campaigns. There are many questions to answer. How much money will you ask for? How many units will that amount produce? What is the fee structure on your platform of choice? Decide on the reward structure and figure out how much it will cost to fulfill those rewards. Find out everything from how much it costs to produce it, ship it, any service fees, taxes etc. Finally, include unexpected costs.
Steps to crowdfunding success – No. 3: have a working prototype when pitching a physical product
Show prospects a working prototype. Yes, you will have to spend some money to produce one, but you are not going to convince anyone by simply telling them about your idea.
Steps to crowdfunding success – No. 4: find your crowd
Crowdfunding does not work without a crowd. You need to know who is interested in your product and start getting them together on social media. Your crowd should also include as many influencers as you can get, such as bloggers, journalists, celebrities – anyone with a highly engaged following. Remember: if you do not have a crowd, do not launch.
Steps to crowdfunding success – No. 5: fascinate your audience
It takes time to get your crowd together. If you do not keep your initial crew interested in what you are doing, they will drift away. These people are coming along for the ride. Show them prototypes, solicit their feedback, and get them involved in the process. Do this right and your product will be more customer-focused, and you will have a large, engaged audience when you launch.
Steps to crowdfunding success – No. 6: communicate after launch as well
Keep your investors and potential investors updated on your progress. This will keep them interested and engaged. Plus, a happy investor will tell others about you and help you market your proposition. Be careful not to exaggerate, though. Tell the truth and keep your feet on the ground.
Steps to crowdfunding success – No. 7: familiarize your crowd with the platform you are using
Crowdfunding has been around for some time now, but many people know little to nothing about it. Consequently, close to the launch date, start talking about the platform you are using. People will want to know where they will have to go, what they will have to do and if it is safe. A little education and some reassurance go a long way.
Steps to crowdfunding success – No. 8: do not run a crowdfunding campaign in December
The timing of your campaigns can be crucial to determining its success. Whatever you do, do not run a crowdfunding campaign in December! People have just finished buying presents, so potential supporters will probably be low on cash. This makes many potential backers more than a little budget-conscious.
Steps to crowdfunding success – No. 9: only ask for the minimum amount you need
Always start with the lowest possible figure that will allow you get an MVP produced. As long as it is reasonably priced, this minimum amount will help reduce any price sensitivity that potential backers may have. Additionally, this leads to more backers getting on board and help your project reach its goal quicker. In turn, this can lead to your project getting featured on pages like Kickstarter’s Popular Campaign page or Indiegogo’s Trending page, which will increase visibility and donations.
Steps to crowdfunding success – No. 10: add a video deck and pitch
Your video should tell potential backers how your product solves a problem you were having and how you now want to make sure it solves their problems too. Surprisingly, a fair number of crowdfunding contributions are impulse buys. So, a genuine human story that the audience can relate to will grab their attention and convince them to contribute. It is getting easier and cheaper to produce professional-standard videos. Plus, it is easy to host them on websites and social media.
Steps to crowdfunding success – No. 11: ensure clarity of proposition
Make sure you are clear about everything, not just for your own benefit but for the benefit of potential investors, too. This includes your target amount of funding, what you are offering to funders and for how much. In addition, be crystal clear about any ‘extras’ you are willing to offer.
Steps to crowdfunding success – No. 12: fire all your marketing guns when launching
On the first day of the actual campaign, start early in the morning and fire all your marketing guns. The only time that matters with a crowdfunding campaign is the first 24 to 72 hours. That means that no matter the length of your campaign, you should act as if you have only one day to fund and you will usually be better off.
Steps to crowdfunding success – No. 13: fulfill your promises
When your successful campaign ends, you now have all those orders to fill. Fulfillment can be an extremely trying time for creators. For instance, managing stretch goals and add-ons, finishing prototypes, dealing with shipping and all the other startup headaches often overwhelm first-time creators. Work hard to meet all your stated timelines. However, if you cannot meet them, keep your backers informed. Most creators find that their backers are their best allies if they know what is going on. Failing to communicate with them can get ugly though.
Marketing efforts required in crowdfunding
When launching a crowdfunding campaign, you will need some marketing skills. Digital marketing, with and without video, has changed a lot over the last few years so what worked for the last crowdfunding campaign might not work for the campaign this year. So, you need to keep up with these changes. Therefore, in How Can Current Digital Marketing Trends Help the Entrepreneur?, I discuss ten current digital marketing trends and what they mean for entrepreneurs. This may help you with your crowdfunding campaign. Also, if you decide to add a video to your campaign, it helps to read Video Marketing Trends the Entrepreneur Should Embrace and 8 Video Marketing Mistakes the Entrepreneur Should Avoid.