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Imagine if you could pre-sell a product that you are planning to launch and then generate revenue to allow you to create it. Well, this is certainly possible with crowdfunding. If you do not have the funds to launch your product then you can use a crowdfunding marketing campaign to raise the finances that you need.
In return for benefits a large number of people will contribute a small amount to your crowdfunding campaign. This method of raising funding is very popular now and there are some excellent websites which will allow you to create your campaign and generate the necessary funding quickly. But you need to know what you are doing.
Prepare your Story
The most important thing when you are preparing a crowdfunding campaign is to let people know what benefits they will gain by supporting you. You need to add other details as well such as how you came up with the idea, what your plan is for the product and how much you are looking to raise. Use these elements for a good story:
- Use images throughout your story
- Have a really high-quality project header designed
- Create a compelling video that has a very persuasive pitch
- Explain all of the benefits of your new product and tell backers how it will solve their problems
- Use a personal story to stir the emotions of the potential backer
- If the product is unique then explain this
Use Rewards as an Incentive
Once your backers are convinced that your crowdfunding campaign is worth backing you can offer them rewards for providing their support. Usually, the backer will receive a more valuable reward the more that they pledge to your campaign. Be sure that you can provide these rewards and that they are valuable. Good reward ideas include:
- An advanced copy of the product
- Free accessories for the product
- A signed copy of the product (books, CD’s, etc)
- A character named after the backer in the book
- Exclusive content not seen by others such as unused lyrics, video footage, etc
- A VIP invitation to a launch event
- A special choice of color or design
Always check with the crowdfunding website that you are going to use what is permissible and what isn’t when it comes to rewards. Whatever you promise your backers you must deliver so plan your rewards carefully to ensure that everything is manageable.
Choose the Right Crowdfunding Website
This is essential. The growth in popularity of crowdfunding has led to hundreds of websites available now. They are all different in terms of their audience reach, the options that they provide you with for a campaign and the audience demographics. We will take a look at some of the major ones here:
- Kickstarter – this is the biggest crowdfunding website and it has been around for a long time. It receives millions of visitors and has raised over $3 billion for campaigners. Your product has to be unique to feature and if you don’t achieve your funding target then you won’t receive a cent.
- Indiegogo – this is another large crowdfunding website which also gets millions of visitors. Your offer does not have to be unique and you can choose the flexible funding option which means that you will receive the money pledged even if you don’t reach your target.
- GoFundMe – this is another massive crowdfunding website. The difference here is that the focus is on non-profit campaigns and raising money for good causes.
- Patreon – this is a membership type of crowdfunding where people pay every month to receive something of value from you. Created initially for musicians but now virtually anything goes such as the sponsoring of people to travel around the world.
- Publishizer – this is a niche specific crowdfunding website that focuses on authors to raise money for the writing of their books. It appeals to a specialized audience that is willing to support authors.
Most crowdfunding websites will allow you to offer rewards for your backers;
Determine your Funding Target
You will need to specify how much you are looking to raise with any crowdfunding campaign. It is important that you do your homework here and are realistic. If you have a unique idea and you want to use Kickstarter then you need to be really confident that you can achieve your funding goal otherwise you will end up with nothing.
As a minimum include the following:
- Consider all of the costs to create your product
- Develop a marketing plan and calculate initial expenses
- Calculate the costs of rewards fulfillment and include this
- Add in administrative expenses if you need support in this area
- Crowdfunding platforms charge around 10% of the funds raised so factor this in
Once you have calculated a final amount add another ten percent for contingencies and miscellaneous costs. You do not want to run out of money with your campaign and then be unable to fulfill any promises that you have made.
An effective crowdfunding marketing campaign needs a good deal of promotion. The “build it and they will come” concept does not apply here. You need to do everything that you can to get the word out about your campaign. Here are some of the things that you can do:
- Let all of your existing contacts know about your crowdfunding campaign and specifically ask them for their support
- Use your social media channels to spread the word far and wide
- Create a press release and use other methods to get the media interested in your campaign
- Find high traffic blogs in the same niche and create a guest post
- Hold a live event to ramp up interest in your campaign
If you don’t fully commit to your crowdfunding campaign then it is unlikely to succeed. Spend as much time as possible promoting your campaign once it is up and running. Use every relationship that you have to spread the word. Get small backers quickly so you will encourage others to pledge their support.
Update your Backers and listen to Feedback
You need to keep your backers interested in your campaign and one of the best ways to do this is to provide them with regular updates. Most crowdfunding platforms will enable you to send a message to individual backers or all of them at once. Keep them informed on a regular basis, as this can persuade them to tell people that they know about your campaign.
If any of your backers provide you with feedback about your campaign then take this seriously. They may make suggestions about how you could improve your product. Thank them for this and tell them that you will consider their ideas.
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