Last Updated on April 8, 2016
Crowdfunding is the wave of the future and if you’re reading this, chances are you’ve heard about it. Websites like Kickstarter and Indiegogo provide a way for complete strangers to find and financially support entrepreneurs or startups in their quest for capital before they can produce their product. If you’re interested in launching your own crowd funding campaign and want to make it as successful as possible, here are a few tips that should help.
Keys to Success
- Give Value – Because crowd funding is a business transaction and not a handout, it’s extremely important to give value with your campaign. If you view your campaign as a donation instead of a purchase you will fail. Give your backers something for their time and they will give you their money. This is not your opportunity to get more money than you deserve. Make it a fair transaction and you’ll be one step closer to success.
- Backers – These are the people who’ve chosen you, chosen your product, and want you to succeed. Treat them well and keep them informed. Offer them incentives for backing you early. Limited edition items or product discounts (for ordering early) are good starts. Don’t be afraid to think outside the box. In fact, get creative and people will be drawn to you.
- Goals – Without financial backing you won’t be able to produce your product or complete your project. Without goals you won’t receive financial backing. People don’t like to commit to things without definable goals. Setting good achievable goals is necessary but you also need to consider goals that motivate and drive. Being a little outside your comfort zone is probably a good thing.
- Rewards – Offer your backers excellent rewards. Set tiers (low $, mid $$, and high $$$) that motivate people to give more than they would otherwise want to give. By creating a tiered system what you’re really telling backers is that they don’t want to be at the bottom. A combination of value, goals and rewards will help contributors select the higher tiers.
- Fees – When planning a successful campaign you need to consider your cost of doing business. Kickstarter for example takes 5% of your overall campaign to fund its operations. Likewise Amazon takes another 3-5% for credit card processing, and the government will take its share in taxes. Plan for these things so you can price your rewards and tiers accordingly.
- Shipping – This seemingly non-important part of a crowdfunding campaign is often overlooked. Make every effort to offer free shipping in the USA and Canada. This will encourage more support and reduce the likelihood that a $3 shipping charge will prevent you from succeeding
- Timing – Plan your campaign so that it begins and ends at appropriate times. If your item is seasonal in nature, take that into consideration. Furthermore you’ll want it to start when people are most likely to see it. Monday morning is a good time. The end time is also important. Ending your campaign when people are awake to make a final push can drastically increase your overall success. Set a time like 12 a.m. eastern when most people are still awake in the USA.
The Campaign Video
The video is one of the best tools you’ll have to help your campaign succeed. Without a good video your campaign will more than likely fail. To give your campaign the best opportunity to succeed you’ll want to make a video that is short but descriptive, sweet but emotionally engaging, and connective. Without a connection to your audience people may be impacted, but not motivated to contribute. Let them feel your passion for your project.
Pitfalls to Avoid
There are a few things you’ll want to avoid so that you don’t kill your campaign before it’s begun. Don’t thank everyone. Save the thanks for the upper tiered rewards. A lot of campaigns offer to thank people for a $1 contribution. It’s unlikely these $1 contributions will amount to anything significant and in reality you’re selling one of your best tools for a meager $1.
Don’t limit rewards. Limiting rewards makes sense for only the top tier rewards. You want those people to feel special for their contribution, but limiting everything looks unprofessional and sends the wrong perception of your campaign.
Deliver on your promises. Remember that every reward you offer you’ll need to pay for and deliver. If you offer a great reward, but don’t raise enough to cover it, you’ll end up paying out of pocket and going into the red on your project. Likewise, if fulfillment of your rewards is too time consuming you’ll either avoid it, or hate it, and either one will be detrimental to your project.
Whatever you do, make sure your heart is in it. If you’re invested in your project and you’re passionate about it, people will see that and support you. Stay honest, don’t embellish results or facts, and keep your backers updated throughout the entire process. Once you’ve established a connection, strengthen it. After all, your success will largely come from word of mouth advertising.
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About The Author
Janelle Pierce enjoys writing about various business issues, and spends her time answering questions like, what is point of sale?