Crowdfunding has revolutionized the art of investing and raising financial support for emerging startups. Thanks to the help of platforms such as Kickstarter and IndieGoGo, GoFundMe, Crowdfunder thousands of small businesses and entrepreneurs have been able to bring their ideas to the market. Despite its economic breakthroughs that have produced a more convenient method to commercial success, crowdfunding is no walk in the park. In fact, carrying out an effective crowdfunding campaign can be a very challenging endeavor. More campaigns fail than those that succeed. This does not mean that the startup is lacking creativity or their ideas are inadequate. Campaigns mostly fail due to lack of preparation. Below lists the most important steps to take prior to launching a crowdfunding campaign.
Establish a Solid Following
Many startups make the mistake of diving into a campaign thinking that the Kickstarter or IndieGoGo community will be enough to complete campaign goals. The truth is that you want your brand to already have a buzz of enthusiastic support from your target audience. These supporters will be more than willing to contribute to your cause. You don’t need a huge following but you definitely want a network of support already established from friends, family, and colleagues. Campaigns that accomplish 30% of their target within the first week of launch are more likely to succeed. The best way to reach that 30% milestone is to have a loyal group of supporters donates on the first day. Just look at the Arki by ZITKO: a wristband that would optimize a user’s walking habits and posture. The startup raised $164,262 of their initial $100,000 goal, and 75% of their backers were from an established fan base, friends, and family. Now that’s what we call “solid.”
Consistent Public Relations and Social Networking Prior to the Launch
To establish a substantial following, you’ll have to market your cause in some way, shape or form. There is traditional face-to-face marketing along with online marketing that should be carefully utilized based on specific campaign needs. If you think that your target audience may spend less time online, you may need to canvas at locations that receive a lot of traffic. On the flip side, if your ideal backer is younger and spends most of their time surfing the internet or on mobile, online marketing may make more sense. This can be done with a combination of blogging, press releases, social networking, email marketing and other online content. Regardless how often or little your target uses the web, it’s important to always use online and in-person marketing. No campaign should limit themselves to just one form of marketing. You just may need to use more or less of either strategy based on your primary demographic. The Moment Karaoke Soundbar campaign was a perfect example of how to keep an audience engaged via PR and social networking. It combined live prototype demonstrations at karaoke bars in the U.S. and in Canada, intense social media marketing, and public relations efforts.
You will most likely get back what you give to any crowdfunding campaign. We know it may sound cheesy, but it’s the truth. It means a lot for backers to know that their contributions are going towards causes outside of campaign objectives. Take for instance the startup, Konifer, the eco-friendly watch that utilizes wood and stainless steel. They emphasized the importance of the environment and would plant a tree for every watch that was sold. It is these types of messages that encourage backers to contribute because they understand that their dollar will go a long way. However, the compensation doesn’t always have to be for a social cause and can be more personalized. For example, MirroCool awarded significant backers with a meeting with the development team along with a complimentary dinner. Whatever ideas you may have in regards to receiving, make sure that it’s finely balanced with what it is you’re giving in return. The more serious you are about giving back, the more willing backers will be in making a contribution.
By laying a solid foundation for your campaign prior to launch, crowdfunding could work wonders for you and your startup. Remember to establish a loyal following of supporters via PR online and offline. Also be sure to focus on what it is you’re giving back and align the gift(s) with needs of the target audience. These are the steps necessary before launching a crowdfunding campaign that will increase your chance of success.
For more tips and insight on crowdfunding campaigns, or to develop and run your campaign, do not hesitate to contact the AH Marketing Group. The AH Marketing Group was directly involved in the crowdfunding campaigns discussed in this article.