So how do you give yourself the best chance of crowdfunding success?
In continuation of our crowdfunding blog series, it’s time to identify 5 strategies for crowdfunding success!
Have the right product.
Crowdfunding isn’t for everyone. You really need a product that appeals to people’s passions and interests or is truly ground-breaking and innovative. Technology, gadgets and digital media therefore crowdfund phenomenally well with top highest business crowdfund to date going to the Star Citizen Video Game which gained over $117million which had an initial campaign target of $500k! The highest pre-selling product crowdfund was achieved by Elio Motors of $25.6m, with more than $340m in pre-orders and 19 million non-refundable reservations prior to going into production as of December 2015.
Set realistic funding goals.
Two considerations here. The first one is perception – how much more of a success story is it that you smashed your funding target rather than just made it or fell short? Obviously you can’t manipulate this too much so think what is the minimum amount I need to raise to achieve my goals and what would be the nice to have? Publically your target will be the former, but privately you will be campaigning in order to reach the latter.
The second value here is that by employing this approach you are more likely to raise your goal and release the funding. This is crucial as already discussed some sites don’t release the funds if targets aren’t met or may charge you more for a partial raise.
FFF – The 30% factor.
Friends, family and fools are your early campaign targets. The best campaigns are able to quickly reach 30% through their network of FFF’s which then gives strangers the confidence to invest. It is said that it only takes 2 people to start a movement and crowdfunding is no different. If you haven’t seen Derek Siver’s TED Talk on how to start a movement watch it now and see the parallels with a crowdfunding campaign. (It’s only 3 minutes long!)
Get your rewards right.
If you choose a reward model make sure the incentives offer real value and are appropriately priced – are you offering a discounted purchase price or full price plus a bonus gift? Are you going to offer different levels of investment and if so do the increased rewards match the additional costs? If not you will find more people going for the lower cost options making it harder for you to reach your goal.
Crowdfunding is also a great way of overcoming upfront production costs if you are marketing a physical product. TENS sunglasses offered a very basic reward structure of the purchase price of their sunglasses with the incentive being that you would be the first to own them. They then capitalized on this social phenomenon with the hashtag campaign #TheRealLifeVisualFilter which saw people taking images of the world through their TENS lenses. If you didn’t have TENS you couldn’t join in….and so begins the movement….genius. And it gets attention; just last week TENS was backed by Richard Branson!
*Remember to factor in delivery costs if you are using crowdfunding to pre-sell a physical product.
Get the campaign right – visuals are key.
Invest the time and resources into producing a good quality pitch video – the payoff is well worth the investment with pitches featuring good quality videos more likely to reach their targets than those without. You should have a compelling story and your passion should be obvious – if you can’t be passionate about your product then why should anyone else care?
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