What platform should you use to launch your campaign?
Well, to start Kickstarter and Indiegogo should be near the top of your list, but you should also be aware that there are more and more specialty platforms and communities as well that focus more exclusively on things like music, healthcare, or non-profits and design.
It’s best to pick among these crowdfunding platforms based on the project types they focus on, the existing community of members already on the platform, as well as the way the platform structures their fundraising product.
What many people aren’t aware of, or are confused by, are the differing fundraising products and how they’re structured. In short, Kickstarter has a strong track record of success for gadgets and creative projects, and their fundraising product has been an “all-or-none” fundraising product to date. This means that if you don’t raise 100% of your initial funding goal, you don’t keep what backers have pledged.
Indiegogo has a different product in that regardless of whether you meet your funding goal, if you choose to pay more (up to 9% of funds raised) they will let you keep any of the funds pledged to your campaign. But this has its drawbacks as well, as often times projects need some minimum funding to work, and sometimes the required goal is a good incentive that motivates both crowdfunding campaign owners and those funding the campaign.
What Is Your Pitch?
It’s important to remember the context of crowdfunding and fundraising online. You’re vying for a persons attention while they’re online, and they have tons of other distractions and things pulling their attention away from you.
It’s for this reason that your initial pitch and messaging absolutely must grab your funder or investors attention right away and pull them in.
Once you have their attention, the way to keep their attention and truly engage them is to engage “the two brains” as we call it. This means engaging both the Rational Brain (the “what” of what you’re doing) and the Emotional Brain (the “why” of what you’re doing).
The most effective way to do this is via telling a great story – either about yourself, the story of your project or company, or the story of your customer or who your project truly has an impact on.
Often overlooked, videos often double success rates for crowdfunding campaigns. You should also be sure to have a clear and compelling “ask” of your funders that relates to your larger story and project.
What’s In It For Your Backers?
It may sound counterintuitive, but while your goal in crowdfunding is to raise funding for yourself, the more you can focus on what is in it for your backers or investors the more likely you are to create a set of rewards or terms that helps you raise the dollars you’re looking for.
In crowdfunding, make sure you develop truly compelling rewards for your backers that tie in to your story and aren’t just swag. As a rule of thumb, simply ask yourself, would I go through the trouble to buy this reward myself? Also think about what is truly and unique and compelling you could offer.
One of the best ways to come up with great rewards is to look at some of the big successful multi-hundred thousand or multi-million dollar campaigns. Each platform leaves the campaigns up online and you can browse through all their rewards.
How Will You Engage Your Existing Crowd?
The most common mistake that first time crowdfunding campaign owners make is to not adequately engage their first level network of friends, family, and supporters. This means having people set and ready to start funding the launch of the campaign on day one. This is important because campaigns that accelerate more rapidly early on and attain a significant percentage of their funding goal in a short span of time often attract more attention as a whole over the life of the campaign.
Do You Have Any Notable Backers?
You might believe that what you’re doing is the coolest things since sliced bread, but regardless of how great it is, there is one sure way to get other peoples attention who have never heard of you or your cool gadget or project before – and that is to get people or organizations involved with your project or business who people already know and have positive associations with.
If you’re involved in a crowdfunding campaign, ask yourself who can you involve in your rewards in some creative and meaningful way so that people will get excited by and respond to the opportunity to get the reward?
Do You have Your Marketing Road Map Built Out Yet?
Read this next sentence twice. Crowdfunding platforms are not listing services.
Regardless of the platform, the results you get from the platform are proportional to the effort and attention you put in to the platform and tying this into your own fundraising efforts both on and offline.
In successful campaign owners have put in tens to hundreds of hours on the creative and marketing planning side of their campaign before launching. They then also have a plan for several “pushes” in their marketing to launch, fund, and push to close funding at or above their goal.
The Big Finish
The overall crowdfunding industry is growing exponentially. In 2011 the total crowdfunding market was $1.2 billion. In 2015 crowdfunding is expected to finish off the year nearing $10 billion in funding online.
Obviously, this means that there are lots of opportunities for those seeking funding and for those who are donating, pre-purchasing, or investing dollars.
But what does the data say for you as someone looking to run a crowdfunding campaign?
Let’s say you’re looking to raise $50,000. As a quick reference Kickstarter’s most common contribution amount is $25. Knowing this, you can do some simple math to better understand what success entails.
Here’s an example of what that looks like…
If all of your funding came at the average of $25 per, and you assumed a conversion rate of 3% of visitors who actually fund your campaign, you’d have to reach over 66,000 qualified people on the web and get them to view your campaign. At the 3% conversion rate, you’d be converting 2,000 people to fund your campaign.
For most people, that’s a lot of traffic in 45 days, and a lot of backers. Do you have the kind of existing network, reach, press contacts, and marketing plan to really meet these goals?
Adding in additional higher dollar amount rewards can help, Most campaigns thus also include several higher priced rewards between $100 up to a few thousand dollars. The point is, it is critical to ‘run the numbers’ up front for your campaign by considering the rewards you provide and how many backers you will need to get at each reward level to make your overall goal.
There’s no doubt that crowdfunding is changing the rules of the game for fundraising and don’t expect the growth or innovation to slow down anytime soon.