Crowdfunding has joined the mainstream. It has also become highly competitive. Each crowdfunding portal may run several thousand projects at the same time. You need a strong, proven strategy to stand out in the crowd and make sure you get the funding you need.
Analysis of successful campaigns across all the major platforms reveals common strategies which contribute to an effective campaign.
#1. Choose the Right Platform
Different crowdfunding platforms have different systems and emphases. It’s important you choose the platform which will best match your project. The two main categories of crowdfunding platforms are reward-based and investment-based.
Kickstarter and Indiegogo are the most popular portals to reward-based crowdfunding.
Supporters make donations for rewards. Rewards can be tickets, visits, merchandise, anything you think your supporters will value. These work well for one-off projects and the creative industries.
If you run a campaign with Kickstarter by opting the right Kickstarter crowdfunding marketing agency, you must meet 100 percent of your funding goals to get a payout. With Indiegogo, you’ll pay them a percentage of funds you raise, but you’ll receive all your pledges even if you fall short of your goal.
Crowdfunder and Circle Up are the most popular equity or investment-based crowdfunding platforms.
Following this model, supporters make a long-term investment in your business or start-up project. It’s like having shareholders. They invest funds, and you promise a return on that investment.
#2. Tell a Great Story
Crowdfunding isn’t like other forms of marketing. You’re not selling a product or a service.
People who visit crowdfunding websites are looking for stories they can believe in. They’re looking for causes to support. They’re also looking for an emotional experience.
There are two ways you should tell your story: through the written word and through video.
Write a Compelling Narrative
Your story has to show your sound business sense and inspire a powerful emotional response.
The most effective stories explain your motives, how you came up with the idea, why you believe in it, how it will make the world a better place, and the struggles you overcame to realize your dream.
Be explicit in your request for support. You can’t do it without them and you needn’t be shy of saying so. They are looking for good projects to support. Pitch to them.
Shoot a High-Quality Video
According to Kickstarter, video pitches increase funding by over 50 percent.
You should tell the same story in your video as you tell in your narrative section. The difference is you can use images, personality, music and testimony to engage your prospects’ emotions. Make the final request by looking straight to camera, making eye contact with the viewer.
Script your video before you shoot, or engage a professional writer to write it for you. Use the best quality equipment you can afford or engage a professional company to make the video for you. Even if your equipment is not the best, make the video anyway. Any video is better than no video. That’s how important a video is to a successful campaign
3. Turn the Focus on Your Supporters
This is something almost all failed projects got wrong and all successful projects get right. It’s true you are asking for money for yourself. That’s the bottom line. But you must shift the focus to the benefits your supporters will receive. Those benefits are material and personal.
Material rewards for a reward-based campaign should be the best, quirkiest, and most valuable you can imagine and give. If you’re short of ideas, research. The main platforms leave their historic campaigns online forever. Check out the successful ones to see what they offered and get inspiration for your own campaign. For investment-based campaigns, the material reward is the percentage return.
For both types of campaign, the personal rewards for your supporters may be a letter of thanks, their name on an honor roll, or the knowledge they are making the world a better place. Again, do research. There’s no harm in copying a strategy that’s already proven to work.
#4. Establish a Leading Investor Before You Start
Not everyone has a personal contact with someone famous in their field. But think creatively about getting someone with name recognition to back you. Many successful and well-known people are happy to support others just starting out.
Make a wish-list of people you’d love to validate your campaign. Approach them one at a time before your campaign goes live. Don’t be frightened. They’re just people. Pitch them as you would any other prospect, but be sure to tell them why you’d value their recognition. It’s easier than you think to get an influencer on board if you have a good project and you’re not afraid to ask.
This person will be your lead investor or supporter. They validate what you are doing and lend their authority to your enterprise. They’ll also make the first donation. When you go live, you’ll hit the ground running and avoid the $0 starting barrier.
#5. Plan Everything from Start to Finish Before You Go
A campaign may only be live for a few months, but the most successful campaigners spend many more months planning, testing, and optimizing everything well in advance of launch. Expect every possible outcome and have a strategy in place to respond to overwhelming success, as well as a contingency in case things don’t work out.
A crowdfunding platform isn’t Craigslist or FreeAds. There’s no set-and-forget mode. It’s all about engagement.
Be present and available throughout your campaign. Build conversations with your supporters. Build a community. Over-deliver on all your promises.
If you’re smart, you’ll devise ways of keeping these supporters on board long after the campaign ends. When you do things right, you’re not only raising finance for your project, but recruiting advocates, customers, and supporters who will be the engine driving your future success.
As the crowdfunding space matures there are numerous new outlets cropping up to help you go from a crowdfunding project to a full-on business post-crowdfunding with distribution opportunities both online and off.
Crowdfunding is one of the most exciting and effective ways of raising capital and engaging interest in your enterprise.
To make it work, you should think ahead, plan, tell a great story, engage with your supporters, build a community, and deliver more than you offer.
It’s a lot of hard work, but if you do it right, it will repay dividends for years to come.