Whether it’s for a product or a small business, crowdfunding (when individuals pool their money together for a common goal) is an excellent and proven strategy to take in this turbulent time. Knowing, however, where to start can be overwhelming. The main concept you need to understand is that crowdfunding isn’t something passive.
It takes a lot of care and hard work, but the more effort you put into it, the more rewards you’ll be likely to extract.
So without further ado, here are the eight “P”s you’ll need to successfully crowdfund in 2020.
1) Pick a platform
With more and more crowdfunding platforms sprouting up regularly, it can be challenging to choose the right one for your project.
In order to determine which one best fits your scenario, you need to consider which kind of rewards you want to give to others. The thing about crowdfunding is that you need to provide value to investors/donors.
The main types, with website names included, are:
Donation-based, where the donor expects nothing for their money, which is why non-profits or social causes use them (GoFundMe)
Reward-based crowdfunding, when donors give money for a reward, usually a product or service (Indiegogo and Kickstarter are the big two);
Equity crowdfunding, where donors give money in exchange for a portion of ownership in the company, which can help launch a company faster than the other methods (CrowdFunder).
Remember, each platform has different fees and guidelines, so choose the best one that will fit your segment and reach your targeted demographic.
2) Present your work
Now we get to the actual campaigning. The most crucial aspect of your crowdfunding campaign is proof of concept.
Theoretically, it could be anything, as long as it is of tangible, material value to your target audience.
Campaigns with visuals, like well thought out photos and videos, tend to attract more funding because of that tangibility.
3) Pitch your ideas
After you’ve chosen the most adequate platform and populated your project with photos of your product or service, you have to convince people to donate their hard-earned cash to your start-up.
The goal is to hit the main points:
who you are, a specific problem or issue that your product solves, and how it solves it.
In short: the who, what, and why of your product. Focus on simplicity rather than flowery language.
Additionally, this could be an opportunity for your campaign and your business to rank in Google Search.
Here’s an article about how to build an SEO strategy for your crowdfunding campaign.
4) Produce content for the campaign (video)
This one is extra, but if you have the funds to do so, a video can help make your campaign grow even more.
You don’t have to go overboard, just explain yourself and the product in a concise manner, about 4-5 minutes.
You can also use this video for advertising on social media sites and Youtube later on.
5) Promise value to your customers
Especially in rewards crowdfunding, you’ll generally have to offer something for their donation.
After all, people on these sites hope to receive something for their money. Setting up rewards can also be a fantastic opportunity to build your relationship with potential customers.
The better the prizes, the more invested someone may be in your success and even connect with you and your products on an emotional level.
Plus, they attract attention from others. Forget those robotic “Thank you” emails.
Have you ever seen a guitar player on the street set down their guitar case, and somehow there’s already money in there, usually like a five? That’s called “priming the tip jar.”
People who see that people have given money already are more likely to give. This campaign is your moment to prime your tipping jar. Try to reach out to friends and family to give to your campaign the moment it goes live. Once you get the activity, it can escalate from there.
7) Plan a Day-to-Day
While the campaign is live, you should prepare a daily plan for updating the campaign. Again, there’s no room for passivity here.
We recommend updating the campaign to keep your donors in the loop and invested in your campaign. You can use this opportunity to connect them to your social media accounts (make sure to set them up beforehand and invite some of your friends to like them).
8) Post your campaign around
Now is not the time to be bashful. Spread your campaign out as far and as wide as possible.
If you have the cash, launch a small PPC campaign on social media, share it with your friends, and even send an email to your contacts using any email marketing provider, like Mailchimp.
Crowdfunding is a great way to improve your pitch and increase demand for your product, but it isn’t as easy as snapping your fingers. It requires a lot of work, and even a bit of trial-and-error before you get it right. However, getting your campaign funded is just the beginning. Once you have the funds, then you have promises to keep to your donors.
Congratulations. Now the real work begins.