Crowdfunding has come into the mainstream as a viable source to secure funds and is used for everything from a new business venture to a charitable effort to a personal cause such as a honeymoon trip. A recent discussion on The Marketing Mojo Show highlighted the importance of marketing the campaign to ensure its success.
The first step is to determine the type of campaign that fits most with your fundraising efforts. For businesses, there are two main types:
- The campaign donor receives incentives based on their gift level. For example, a $20 contribution to a new custom donut delivery shop might offer you a free donut and a $500 contribution might yield you a coffee and donuts party with the owners. Kickstarter is a popular choice for this type of crowdfunding.
- The campaign donor makes an investment in the company to be paid back once the business is financially able. Kiva is a popular choice for this type of crowdfunding.
And since there are so many crowdfunding websites, picking the right partner is important. Some sites specialize in artistic ventures, such as ArtistShare, some for real estate, such as RealtyShares. Some specialize in more charitable causes such as GoFundMe, some are more appropriate for a product or book launch such as Indiegogo, some for a medical or personal cause such as GiveForward and some are very specific, such as HoneyFund for honeymoons. Some partners will fund your project only when your fundraising goal is fully realized, some when your goal is partially realized and some have no requirements. Should you choose the former it becomes extremely important to set a realistic financial target and perhaps on the lower end so you will be able to receive the funds.
Less than 60% of crowdfunding ventures reach their goal, so it’s easy to see why marketing is so important. Here are the key components for success:
- Develop your target audience.
- Conduct a pre-launch introduction with current customers, interested parties, family and friends. Listen to their feedback. Revise, tweak and thank them. Get commitments from them for day 1 to increase the appeal for others.
- Choose your rewards thoughtfully whether they are items or experiences. Don’t break the bank and be creative and distinctive, preferably with rewards tied to the campaign’s brand.
- Reach out to your social media networks on every platform. Consider paid ads.
- Make your information easy to share with links and embed codes.
- Produce a video for your website and upload it to YouTube and everywhere else.
- Use the suggestions and templates of your crowdfunding partner and tweak it to fit your needs. If you’ve picked the right site, their experience will help guide you.
- Thank and communicate with contributors throughout to keep your campaign top of mind with them.
- Follow up with contributors to gain important data such as how they found out about the campaign. Use this data to focus on the channels which are the most effective.
Obviously there are many considerations – do some research on the front end and your marketing efforts will have much more impact.
Get more from Miranda Marquit, a financial journalist in this clip from The Marketing Mojo Show’s podcast on the Crowdfunding Phenomenon: How to Position and Pitch Your Business for Capital.
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