5 Essentials for a Successful Crowdfunding Campaign
Crowdfunding is the sweat equity of financing. Every company, no matter how small, can succeed but it requires a lot of work.
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In an ever-changing marketplace, large businesses struggle to keep up with the latest in technology and innovation. Corporations move at a snail's pace, committing millions to research and development, while tech-savvy entrepreneurs often innovate in months (and sometimes days or hours!) rather than years.
As a result, crowdfunding (often coupled with social media advertising and email marketing) is positioning small business as the "go to" for innovation and information services. In 2013, crowdfunding raised more than $5.1 billion worldwide and is expected to hit $10 billion by the end of this year.
With this growth comes greater competition, so in most cases, each crowdfunding campaign need to be even more compelling than the last to snag the attention — and the dollars — of the growing crowd.
So how do you do it? If you are considering crowdfunding, you have likely already read tips and tricks from those that have "been there, done that." You know you need to create a video, share your campaign on social media, and test the market with friends and family early on – months before you launch, even - to get a steady flow of contributions going from the start.
Consider these five little known suggestions to help you supercharge a successful campaign:
1. Presentation is everything
How you present your idea on your campaign page is likely more important than the idea itself. You have just seconds to grab the attention of your potential supporters, so make sure your campaign page and video has a clear and concise message that pleads your case with the who, what, when, where and why – especially the why.
For the video, if you are not a strong presenter or are uncomfortable on camera, get someone else to tell the story. Every word throughout the entire video must have deliberate intention and meaning. Open with a question related to why your product is needed. Include testimonials from those who have seen your idea and loved it.
A decent camera phone with enough light will record at high enough quality to look professional, if you include the right messages behind it.
2. Pay to promote
Some crowdfunding platforms, such as Indiegogo, allow campaigns to begin using contributions before the campaign is over, so be willing to return a portion of your contributions to your campaign to increase its overall reach.
Use contributions strategically, such as to create sponsored posts on Facebook. A PR advisor can advise on overall positioning and promotion, including how to write and post a press release on the campaign launch. Consider partnering with a search engine optimization expert to help contributors more easily find your campaign.
Contributions invested wisely will increase the total number of contributions and more than cover what you have spent.
3. Press releases don't equal direct leads
A press release launching your campaign, and any articles that appear as a result, can go a long way to build awareness and credibility. They will remain online, and easily found, indefinitely if sent over a wire service, such as Business Wire or PR Newswire, but don't consider them lead generation tool.
Even if your team consists of one person - you - coupling traditional public relations with advertising and sales tactics will help you get additional leads and turn them into contributions.
4. Keep communicating, even to naysayers
There is nothing worse than contributing to a campaign and then never hearing a peep again until the product ships -- if it ever does. Keep your contributors in the know on shipping dates, interesting milestones and relevant news. That builds credibility for you and the campaign.
If they have questions, respond promptly. If they praise you publicly, respond with gratitude. If they complain publicly, respond with a clarification or apology, as appropriate. Just respond.
5. Return for a second round of funding
With traditional funding, businesses often seek a seed round from private investors or banks, then progress, regroup and return for a second "round' of funding. You can do the same with crowdfunding, which is one of several reasons to start with a modest request.
While you might need $500,000 or even $1 million to turn your idea into a real shipping product, asking for that amount is usually a mistake. Set the goal at the minimum you need to take the project forward. A goal of $10,000 or $25,000 is much easier to reach. If you succeed far beyond that goal, it is a much more exciting story for the media.
It's especially important when using a platform like Kickstarter, which only releases contributions if you reach your goal. When you need more capital to expand the capabilities or international reach of your product, you can return to ask for a second round of funding from the crowd.
Crowdfunding is not necessarily going to be the miraculous savior to your suffering business or a get rich quick scheme. It is, however, an extraordinary model that, if done properly, just may help you fund your industry's next big idea.
Related: 4 Famous Crowdfunding Fails