If I had a million dollars…I’d be rich.
– a catchy tune by the Bare Naked Ladies in 1992.
Now in 2014, crowdfunding has allowed many entrepreneurial thinkers the ability to sing a different tune. If I had a million dollars I’d build, create, donate, share, prototype…and the list goes on.
There are plenty of other good reads on how crowdfunding has fostered a new culture and disrupted the financial landscape but I’ll just stick to how to create a successful crowdfunding campaign. Crowdfunding is a rapidly growing industry that requires both business strategy and online marketing tools and tactics, on a campaign level.
There are plenty of people walking around today with great ideas, but we don’t talk about most of them. There were plenty of people walking around in yester-years with great ideas, and we only talk about a few of them, after they are long gone.
So the question is – how do you give your idea legs to walk on and get people talking? And ultimately support it with some dead president paper.
Here is what you need in a crowdfunding plan, set up and strategy.
Crowdfunding is not a ‘set it and forget it’ venture. Campaigns need ongoing attention to their various aspects. Before filling out your crowdfunding page and pressing ‘go’, have a few plans in place and not just an A & B plan.
• Logistics Plan
Creating a blueprint for success doesn’t start with the campaign launch. There needs to be considerable prep in creating a project timeline to secure.
Various crowdfunding platforms (IndieGoGo, Kickstarter, and numerous others) have constraints and requirements. Familiarize yourself with the platform's term and business model. Example: You shouldn’t market your product to any areas where the platform doesn’t ship.
• Marketing Plan
Marketing a passion project or idea presents limitless opportunities and potentially endless tasks. The first step is thinking about what kinds of marketing you will need to deploy and on what channels your customers will entertain your idea. Oh and while you are at it, defining a brand tone of voice, personality and branding guidelines.
Take Kinda Fancy, a successful campaign, which helped to fund the production of some super rad bikinis. The Kinda Fancy team didn’t shy away from creating a brand that reflected their own personalities or finding various ways to share their passion product with potential funders/customers.
• Outreach Plan
Outreaching to bloggers, journalists, networks, family and friends is key to the success of any crowdfunding campaign. Establishing a plan for consistent social media coverage throughout the campaign will help to keep the campaign top of mind for potential funders. Meanwhile, creating content and getting placements will help to reiterate the campaign and brand, within its niche.
Funding from family and friends usually comes in at the beginning of a crowdfunding period, but can then taper off. Don’t account for a consistent flow of funds unless you continue to engage new and interested audiences.
• Fulfillment Plan
Filling orders for founders’ various tiers, perks or actual products is of the upmost importance to brand reputation. Working with vendors to ensure funders are getting what they expect, when they expect it. There are numerous variables at play with crowdfunding, so it is important to work with vendors and suppliers that can offer some flexibility of orders requested and the agility to generate more product if needed.
Many crowdfunding platforms now encourage campaign owners to detail the risks or challenges with fulfillment. This upfront and consistent communication throughout funding and post-funding is crucial to a campaign’s success.
• Customer Service and Feedback Plan
Listening, responding, researching and learning from those who engage with your campaign is crucial to the success of both your campaign and business. There should be goals set up for an appropriate response time, direction on how to address customers, and a tracking plan for how to follow up on customer requests.
A crowdfunding campaign should be seen as an excellent opportunity for R&D, whether it fails or succeeds. Seek to engage funders and potential funders in a conversation that helps you understand their needs and your target market a bit more. This information should be synthesized and shared in order to keep the customer top of mind and inform future decisions about the company direction.
• Financial Plan
It’ll take some money to make some money. While that is a big part of what crowdfunding is about, there should be a plan for what costs are going into the campaign, post-campaign production or delivery, as well as the actual amount received through funding (it varies between platforms in terms of service fees and cuts).
Successful crowdfunding campaigns, like Kickstarter campaigns, that are run by either individual institutions or companies will owe federal income tax and possibly self-employment tax, state taxation. Deciding what to register your business as and when to run your campaign during the year could help to alleviate some costs associated with taxation.
Assuming you have an idea for a campaign, have rallied together supporters and workers, and chosen a crowdfunding platform – it is time. Be sure to check out your crowdfunding platform's how-to guides and see if they offer any customer support or service for you to tap into upfront or later on.
Three things to focus on while setting up the campaign…
Rock Solid Content
The content should tell the potential funder what idea they should be a part of creating. While receiving a product, pre-launch or being one of the first to own something unique has inherent value to customers – they should also be moved to share the campaign story.
Crowdfunding platforms with visual content tend to perform better. It should also be noted that hi-res photos, video, animated gifs and mock-ups are all ways in which to visually communicate something that may or may not be an actual product. Funders are buying into the story of your idea and literally paying you to let them be a small part in the story. Creating solid and shareable content is key to enticing potential funders and appeasing funders who want to see what they are a part of.
Cheers by Tiers
The tiers or perks with a given campaign should thank your funders for their time, interest, feedback and monetary contribution. There are numerous creative ways to use tiers both on the low end with a ‘virtual high five for $5’ or a ‘come work with our team / live in our poolhouse / name our first-born son / eat free food for $5K.’
Tiers should also be seen as a means to engage funders with aspects of your brand, without breaking the bank. Branded swag, like t-shirts and mugs, is great but be sure to account for production and shipping costs so it won’t cost you in the end.
The Idea is Your Own, So Own It
You should be able to back up your idea with hard proof that you are passionate and dedicated to its success. This not only helps you to gain traction and attention later on but also helps you to get your campaign approved. Some crowdfunding platforms can approve or disapprove campaigns, based on their legitimacy and direction. Choose a platform that aligns to your goals and be ready to articulate how using crowdfunding will help you to bring your idea to life.
Crowdfunding also tends to attract ideas that not only grow in funding and reach, but expand the product/service offering that was initially pitched. Various crowdfunding cases studies highlight people who couldn’t reach their goals or meet their customers’ expectations because they were only focused on either the forest or tree.
A crowdfunding strategy that works to fulfill the potential of the idea while building the business = golden!
Take Fire & Bone, a successful campaign, which funded the first production run of true-to-life jewelry and collectibles derived from real animal skulls. The Fire & Bone team successfully planned and fulfilled all orders – which was no small task as the collectibles are made through both 3D printing and wax casting. They also made it a point to communicate with funders on their progress and continue to listen to these customers. This has helped them expand both their online business and product line.
Truly creative ideas depart from the everyday and provide something to individuals they didn’t know existed. Crowdfunding marketing helps to show them why they now need a piece of that creative idea.
Crowdfunding has created an environment where new ideas can become realities and, in doing so, given almost everyone the means to become a creator of something new.
So what about you? Any advice on how to run a crowdfunding campaign or deploy marketing tactics to help increase funding? I look forward to your comments below!