Crowdfunding has become a way for businesses to get funding outside of looking to investors to get their projects off the ground. However, with so many projects on the market in different categories, startups need to make sure that they not only have a great product or service, but they also know everything that goes into a successful crowdfunding campaign. Ultimately, to run a successful campaign, they need to capture the attention of a large number of people and convince them that their product is worth their investment.
In this article, we will look at:
1) Types of crowdfunding
2) Crowdfunding tips for a successful campaign
Types of crowdfunding
There are four kinds of crowdfunding campaigns that companies can use to fund their venture with small donations from a large audience. They provide the necessary boost that companies need towards cash flow to get their ventures off the ground or launch new projects.
1) Donation-based crowdfunding
Much like the definition of donation, people give a campaign, company, or person money for nothing in return. Usually, individuals will give money out of support for the business’s growth and do not expect anything back.
In this case, the money pledged by backers is considered a loan and must be repaid at with interest by a specific deadline.
This is the most common form of crowdfunding where donors receive something in return for their donations. Generally, rewards vary by size of the donation, which provides an incentive for higher contributions.
There are not many crowdfunding campaigns that allow backers to own portions of the company they are supporting. Equity-based crowdfunding enables small businesses and startups to give away an amount of their business in exchange for funding. This type of donation is considered a type of investment where participants will receive shares in the company depending on how much money they contribute.
At the moment, there are currently four powerhouses in the online crowdfunding platform landscape: Kickstarter, GoFundMe, LendingClub, and Indiegogo. Before we look at some tips for creating a successful crowdfunding campaign, we need to understand each platform so that there are no barriers to launching a campaign.
Kickstarter is a rewards-based donation platform that has helped companies raise money since 2009 and has raised over $5 billion for more than 182,000 projects. The platform does not allow equity crowdfunding and has a list of prohibited items. GoFundMe is a donation-based crowdfunding company that is famously used for more charitable initiatives, but businesses can also take advantage of the platform. Thirdly, LendingClub is a debt-based crowdfunding site based on P2P lending. The platform offers up to $40,000 in personal loans and up to $500,000 in small business funding. Finally, Indiegogo is another reward-based platform, but it provides two kinds of funding; fixed and flexible. Fixed funding allows companies to set a goal for a certain amount of money. If they do not reach their target, all funds are returned to donors, while flexible funding is when a company can keep any amount of monetary support whether they hit their goal or not.
Now that we know the different crowdfunding types and the four leading platforms let us look at some tips that startups and entrepreneurs can follow to create a successful crowdfunding campaign.
Crowdfunding Tips For a Successful Campaign
There are quite a few stages to any crowdfunding campaign, if all steps are done correctly and effectively, then the campaign will have significantly higher chances of success. The stages include research, pre-launch, funding, and post-launch.
1) Do your research
Research is the first stage of any crowdfunding campaign; it is crucial in determining the project’s success. The main objective of research is to help companies understand their product’s value, demand on the market and explore the strategies that their competitors have used and successfully implemented. A company’s development should be compared to other similar products and their benefits, target audience, and positioning during the research stage.
1a) Learn if the audience is interested
Regardless of what type of company it is, the first task should be to ensure that they have a good product-market fit. Rather than solely look at the opinions of loved ones, companies need to get a more objective idea of their product’s potential by getting market validation from potential backers. Companies can use analytics tools that are designed to figure this out. Using those techniques, they can learn if their audience is interested in their product and whether they will buy and test the product at the price provided. There are tools out there to help determine the add-to-cart-to-purchase ratio and the correlation between behavior and purchases. Some can also forecast through accurate market projection, consumer behavior, and the percentage of people returning a Kickstarter campaign.
1b) Get early subscribers
Through research and analytics tools, companies can already shape their audience and obtain ambassadors for their products. Through insightful analytics, companies can see how well their product performs based on industry averages and can make the respective changes in their product’s features of price to make it more attractive to potential backers. Proper research is an affordable method of gathering qualitative evidence on the product’s potential, and finding the right market and the right price for the market.
2) Research similar campaigns
Another way to know whether a campaign will do well is to see how similar campaigns have performed. Companies can analyze their competition’s performance by analyzing their funding curves through trackers like Biggercake, which is only available for Kickstarter and Backertracker. Not only will it help companies see whether their product will get backed, but it also helps determine which platforms work best for their product.
It is important to remember to gain insight from recent data from recent campaigns since old campaigns that may have been successful in the past may not be successful at the moment. It is also possible during the research process that companies will come across many similar products and competitors. Rather than getting discouraged, companies can figure out how to improve their product and make it stand out by taking into account other companies’ experience, users’ feedback, and other factors.
3) Examine similar products
It is common to come across similar products in the market as a startup plans to launch their own. Another way to increase the chances of their product’s success is to examine similar products on Amazon and other e-commerce websites during their research process. They should pay close attention to the number of reviews the other products have received and read the comments and reviews to understand better what features consumers like, what did not work well, and what needs to be improved.
4) Identify PR and marketing strategies that have worked
Research not only involves understanding what products already exist in the market; it also includes evaluating how successful crowdfunding campaigns were able to use effective PR and marketing strategies to reach their target audience. By simply typing in a competitor’s name into any search engine, companies can see how their PR efforts allowed them to gain the appropriate media attention for their product.
Companies can also examine the advertisements their competitors have used to see what consumers are interested in, whether it is more visual or text-based, and where they have posted their ads.
5) Read past success stories and case studies
Since a crowdfunding campaign relies on consumers, for a campaign to be successful, companies should also pay attention to past success stories and case studies from other campaigns. This allows companies to learn the best practices from the best campaigns to apply them to their own.
6) Brainstorm for potential targeting options
In addition to having a great product, companies need to find suitable targeting options to reach the right audience. It is worth sitting down and figuring out keywords and techniques that are somewhat related to their product, so their efforts do not go to waste.
Launching a crowdfunding campaign is no longer just as easy as submitting a product, sitting back, and watching the money roll in. Because of this, preparation for a campaign launch can begin months before the actual launch date. Through thorough practice and proper research, companies can shape an audience to look forward to launching before the campaign even goes live. The pre-launch stage is an essential step because it helps campaigners test the market, find the right niche, and collect large numbers of potential backers.
1) Create a landing page
In digital marketing, a landing page is a standalone web page created specifically for a marketing or advertising campaign. It is designed to convert visitors into leads. It is different from other pages on the company’s website because it generally has a form that allows companies to capture a visitor’s information exchange for the desired offer.
To look more professional and be considered an established business, startups need to create a creative and user-friendly landing page. This will encourage potential backers to invest their money in the business. Several tools exist that help companies with little or no experience to create landing pages and websites that will attract even the least tech-savvy website visitors.
2) Integrate with analytics and other functions
Most web pages and landing page tools now have built-in tools to help companies integrate their performance through analytics. By doing so, companies can easily track their results and have a concise place to check their progress throughout this stage and further on.
Companies should also add tools on their landing page to help with their email marketing efforts to turn casual readers into subscribers. They can use tools that make it easy for them to customize and embed forms on their website and use unique platforms with many variations to remind their visitors to subscribe and back their project.
3) Use appropriate visuals and provide valuable information
Once the landing page has been created, it is now time to pique backers’ interest in the product. Companies need to have high-quality visuals and provide valuable information so that consumers know exactly what they are putting their money into and why they should choose this product over others.
Startups should capture their product in situations that it was meant to be used in and try to help their target audience identify themselves with their product through their pictures. Since we have quite short attention spans these days, companies should should emphasize their product’s unique selling points through their photos. High-quality images make a product more visually attractive and much more likely to get noticed. A company should make it possible for potential backers to learn about a product merely by looking at the photos. This means that they should reflect the key features of a product and show them in the best light.
Companies should remember not to overload their page with disorganized content. If people were to find themselves on a confusing page, they would more than likely go somewhere else rather than struggle to find important information among your chaos.
Additionally, the way they describe their product through text should provide value to consumers and help them to understand why it is necessary to back the product to see it go to total production. Creating newsworthy content can be stressful, especially with so many other responsibilities that companies have when launching their business, product, or service. This is exactly why PR agencies like Pressfarm exist – to help brands to create newsworthy content that will help them gain media coverage for their project.
Pressfarm’s PR experts and writers create everything from press releases, press snippets, and guest post articles, in addition to other content that can gain traction for their crowdfunding campaign. They also design creative press kits which can make a memorable impression for a company, both in the media and among their target audiences. All of their PR packages include access to their PR database of over 75,000 journalists and media professionals that fit their industry. These PR professionals also develop curated media lists, personalized to fit the niche and stage of growth of each startup. Combined with the comprehensive PR database, these lists help companies connect with the right media contacts to help them reach their target audiences. Finally, the experts at Pressfarm help increase online visibility by helping companies feature in relevant search results on various search engines through their knowledge of the digital PR landscape and SEO.
4) Use email marketing
Once companies create a media list of their target media professionals, they should employ email marketing to get the word out there about their business and product. Email marketing is not necessarily way to connect with media professionals, but it is an effective way to get their attention.
The company’s email should provide all the necessary information about the company founder, how and why the product was created, its benefits, and a clear call-to-action. An important thing to note is that sending emails should be a way to develop mutually beneficial relationships with media professionals and audiences. So, if companies decide to use this strategy, they need to understand that they should not write the email to benefit themselves alone; they should also offer the media professional some value. Journalists do not like feeling like a means to an end, so companies need to find creative ways to convince them to write or talk about their story.
If companies plan to use email marketing to email their current and potential backers through subscription newsletters, they need to remember that consistency is critical. They should plan their emails simultaneously every week or even plan them so that their subscribers are excited about the following email.
5) Drive traffic to the landing page
Now that the landing page and its content have been created, companies need to find ways to drive traffic towards it. They can do this by using social media ads, lead generation ads, or create conversions to drive relevant traffic.
Along with that, they should also create at least 2-3 different versions of their landing page since they are still in the experimenting phase. This allows them to test which landing page works better with their backers, and they can choose the one which generates the best results.
Since crowdfunding is all about being able to gain a large audience to back a project, they should also organize a referral program so that backers have more of an incentive to refer their friends and earn rewards from the campaign. Referral programs are a great way to drive traffic to a landing page because it rewards participants with tangible gifts that will motivate them to participate in the project.
6) Social media to reach audiences
Social media has become an easy way for people to communicate with people all over the world. Messenger marketing or chatbots have also become a way for companies to communicate with their audience in a more straightforward way. Tools like ManyChat have given companies an easier way to communicate because of its easy-to-use user interface and flow building. Many messenger marketing platforms are now doing a great job of constantly developing and enhancing the platforms’ functionality and usability. They also allow companies to schedule a broadcast for their segmented audience whenever they wish.
Influencer marketing has also become a way for companies to get the word out there about their business, but it needs to be done effectively. Companies that plan to use social media and other video platform influencers need to pay attention to how engaging their target influencer’s posts are; the number of comments that each post receives can be an excellent way to assess their engagement rate. Along with finding the right influencer, they need to choose the right social media channel to promote their product. In this case, they need to consider the price of the product and how they plan on promoting it. According to professionals, products that are cheaper in price tend to work well on platforms like Instagram. In contrast, expensive ones tend to work better on video platforms like YouTube, with its plethora of influencers doing product reviews and unboxings for a living.
When it comes time to communicating with the influencer, companies need to influence a clear understanding of what kind of content they expect, but in a way that doesn’t hinder their creativity. Secondly, influencers do tend to enjoy free products. While influencers with a large, passionate following tend to want to get paid in cash, supplementing the fee they charge with free samples can also boost exposure to a campaign and product. To give influencers an even greater incentive to promote a product, companies should create secret rewards that are specially designed for influencers, which is a great way to motivate them to spread the word.
It is essential to only launch the campaign when there is a high-quality, functional landing page. Otherwise, the project will not gain the visibility it deserves. It is important to note that different crowdfunding platforms take a varying length of time to approve projects, and companies need to cater to this. For example, Kickstarter generally takes about three days to approve a campaign, while Indiegogo typically approves them instantly.
1) Launch Kickbooster campaign as a supplement
Along with the original crowdfunding campaign, companies should also launch a Kickbooster campaign, an affiliate marketing platform for Kickstarter and Indiegogo campaigns. Kickbooster helps creators run and manage their affiliate marketing programs separate from the original campaign but in an all-in-one integrated platform.
2) Submit the project to backer communities
Along with Kickstarter and Indiegogo campaigns, crowdfunding promotion services significantly contribute to a company’s fundraising efforts. Companies can generate more traction for their project by submitting their project to product listing and newsletter services.
Some of the services include Product Hunt, Backerkit, GadgetFlow, and many more. Platforms like Product Hunt allow users to share and discover new products. It is a platform that unites many inventors, early-adopters, and gadget-aficionados to significantly raise awareness for a product and generate leads to conversions.
Tracking the results
Result tracking is essential for companies when choosing relevant strategies for their Kickstarter campaign since it helps them understand what they should focus on more.
1) Track campaign page results
Two tools used to track conversions easily and other metrics are analytics found through crowdfunding sites like Indiegogo or Kickstarter and Google Analytics. Depending on which platform the company decides to use, they will always be able to access their analytics through the native dashboard of the platform. Additionally, Google Analytics is one of the most reliable choices when dealing with conversions and user behavior.
When measuring analytics, companies need to keep an eye out for a few factors: age & gender, bounce rate, conversation rate, and funding per visitor. By finding the most relevant age and gender of real visitors and customers, companies can target their ads more precisely and find influencers with relevant audiences. Secondly, they can keep an eye out for the bounce rate to see why people click out rather than stay on their page. If the percentage rate is relatively high, they know that there is something wrong with their page’s content, design, or even their product price. Conversion rate is the metric that companies need to pay the most attention to because it shows the percentage of sessions that have resulted in a transaction. They can also see the amount of funding that each visitor provides towards their product.
Creating a successful crowdfunding campaign is not just a one-time thing, and it is a long process of constantly trying to understand what works and what does not, depending on the avenue and the audience. However, by understanding tips and gaining insight into the different parts of the campaign, companies have a clear path of what needs to be done at every stage to have a successful crowdfunding campaign. With so many campaigns out there, running a successful campaign is about more than just having a great product and vision. It also involves understanding the demographics of target audiences and providing a solution to consumers’ wants and needs. Either on their own or with the help of PR professionals, companies can apply what they have learned to get the funding they deserve and transform an idea into reality.