Small and large businesses alike are beginning to notice crowdfunding – the fundraising strategy that has evolved from a niche approach to one of the most pervasive opportunities in the industry – and it’s important that entrepreneurs everywhere do the same.
Whether you’re launching a new product, trying to fund a new idea, or looking to raise money for a particular entrepreneurial endeavor, crowdfunding may be the answer to your financial shortcomings. However, if you’re going to leverage crowdfunding, you must recognize the three most important keys to campaign success.
These three keys are campaign ideation, campaign design, and campaign promotion. By taking a step-by-step approach – and spending time with each of these important aspects of crowdfunding – you can increase your chances of success. Let’s take an in-depth look at each key and what you need to do.
#1. Coming Up with a Good Idea
The first key to being successful obviously lies with an idea. You can’t very well launch a campaign if you don’t have an idea of what you’re asking and what value is being presented in return.
The idea is less about what you’re raising money for – this is typically the first thing you figure out – and more about how you’re going to raise money and why backers should feel inclined to support you. On most crowdfunding platforms, backers or supporters are given rewards in return for their financial support. In order to stand out, you’ll need to carefully brainstorm some good ideas. Here are some tips:
- Offer copies. Whenever possible, the best reward you can offer is a copy of the item itself. This only works if you’re raising money for a physical product or service, but it certainly helps attract support.
- Reward with experiences. Outside of offering backers a sample product or service, the next best thing you can do is present supporters with experiences. Whether it’s a one-on-one conversation with the business owner or a behind-the-scenes look at the production facility, experiences are often more valuable than material goods.
- Strategically set levels. Most crowdfunding platforms are setup by levels. In other words, the campaign allows backers to give different amounts. On your end, you need to strategically set these levels with increasingly valuable rewards to encourage people to give more.
Rewards are necessary and important, but you also don’t want to go overboard. As Noah Dentzel, an entrepreneur who’s enjoyed considerable success through crowdfunding, points out, sometimes simple is better. “We also found that offering more rewards made things increasingly turn into a logistical nightmare,” he says when reflecting. “That’s something that we wanted to avoid.”
#2. Developing a Well-Designed Campaign Page
The second key to crowdfunding success is to design a functional and visually appealing campaign page that converts visitors into backers. Here are some tips you’ll want to keep in mind as you handle on-page design and optimization:
- Make video a priority. Did you know that campaigns that feature videos have a 66 percent higher chance of being funded? Even more impressive is that fact that 50 percent of these campaigns go on to be fully funded. There’s no clearer way to say it – you need video on your page to be successful.
- Develop crisp copy. If you aren’t a professional copywriter, then you probably need to hire one. You need crisp copy that is succinct and informative. Too much verbiage and you’ll lose your audience. Too little and they’ll be confused. Spend time developing written content that directs your users to a specific call to action (funding).
- Optimize throughout. There’s a misconception among crowdfunding newbies that your campaign is set in stone after it starts. Don’t fall for this myth. Ongoing optimization – during the campaign – is crucial to success.
By spending time designing and optimizing your campaign page, you can make potential backers feel more comfortable and informed. This will make the third aspect of crowdfunding – marketing and promoting – that much easier.
#3. Marketing and Promoting Your Campaign
“The most important aspect to your campaign is to share it: no one will be able to help you if they aren’t aware of your campaign,” writes Sara Margulis of Plumfund, one of the largest online fundraising networks. In other words, marketing and promoting is extremely important. Here are some tips you need to know:
- Start with a firm foundation. One trick successful crowdfunders use is actually earning funding commitments before the campaign starts. In other words, they seek out close friends, family members, and business partners, and secure verbal commitments prior to launch. Then, once the campaign starts, these folks contribute and the campaign is given an immediate burst of momentum. The benefit is that others see the support and assume the project has merit.
- Put the “crowd” in crowdfunding. In order to be successful with crowdfunding, you must have a “crowd.” This means establishing and using your social media networks. “If you don’t already have a crowd, spend time building a following,” writes Sally Outlaw, a crowdfunding industry expert. “Because social media venues such as Facebook and Twitter are the key channels you can control for promoting your campaign, it’s important you build these up well in advance.”
- Find guest blogging relationships. In an effort to funnel as much traffic as possible to your campaign page, you need to pursue different channels and strategies. One of the best things you can do is establish guest blogging relationships and publish loads of content that drives targeted traffic to your page.
Marketing and promotion will make or break your campaign. While it’s certainly important to develop a good idea and design an effective page, you won’t go anywhere without visitors. You’ll want to spend most of your time attracting these visitors.
Benefit from Crowdfunding
It’s clear that crowdfunding is a powerful mechanism for raising money. The question is whether or not you, as an entrepreneur, know how to take advantage of this wonderful opportunity. By focusing on the three keys – ideation, design, and promotion – you can greatly increase your chances of success. Keep the tips and information referenced in this article in mind and don’t be afraid of taking strategic chances.
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