One of the more surprising changes in recent years is the rise of crowdfunding in businesses. In the past, it was mainly for passion projects and art, but the rise of Kickstarter and other platforms have made it a favorite way for innovative people in business to get the funds they need while also building up solid buzz for their company and product. If you are thinking of using crowdfunding, here are some basics.
Know The Types of Crowdfunding
Before anything else, you will need to familiarize yourself with the basics of crowdfunding. While Kickstarter is the popular face of crowdfunding, it is not the only option that your business might have. For example, donation-based crowdfunding is very popular among those who face severe illnesses or need to pay for emergencies. This won’t likely be a good choice for a business unless under specific circumstances. Your store might have been burgled, and you need a quick infusion of cash to keep things running. This situation may be able to convince loyal customers to chip in and help out. But for a lot of businesses, rewards-based crowdfunding is the way to go. This method promises those who donate a possible reward that depends on the amount of their donation.
Have A Specific Goal With Your Campaign
Your crowdfunding campaign is not going to have a good start if you don’t have a specific goal in mind. For example, you might be reaching out to crowdfunding to fund the production of your newest product. This is the usual approach for a lot of businesses who get into crowdfunding. Whether it is a video game, a toy, or even a tech gadget, crowdfunding allows your business to risk less money. A lot of people are treating it as a fancy pre-order service, and many businesses take that approach. As for goals, set a target number. You must get the number right. If you don’t and run out of money, you can expect disappointed customers who will make your next crowdfunding campaign a lot more difficult.
Get Maximum Visibility
A necessary part of crowdfunding is the increased promotion of the crowdfunding campaign. It works on the idea that the larger the crowd, the more your potential donations are. To ensure that people know about your campaign, you need proper marketing for it. But it isn’t as easy as it sounds. Successful crowdfunding campaigns have always been good at reaching the right people with their marketing. If you want to be sure that you are spending good money on marketing, hire a team focused on your demographic.
For example, if you are crowdfunding a tech gadget, then you need to work with a tech-focused PR agency to promote it in the right places. They can help get your product features in the right blogs and websites. Their skills also help with creating ads that can catch people’s eyes. They can also come up with unique promos and advertising ideas that you haven’t thought about.
Be Ready To Monitor The Campaign
The big mistake that a lot of crowdfunding campaign runners make is that they open the campaign and hope for the best. Your approach should be the opposite of that. The moment that you start the campaign, you should be aware of what is happening. For example, with good monitoring, you should be able to find out more about your backers’ concerns. Reassuring them can ensure that they stay friendly and even encourage others to back a project.
Plan Updates And Rewards
To encourage people to back the project, you need to offer an incentive as a great reward. Additional rewards are what a lot of people want to get when they back at higher levels. If you can offer tempting enough rewards, then you can go beyond your original goals. Additionally, backers like it when you give them updates. Schedule updates during the campaign, and you can expect more money to come in. It shows that you are listening to feedback and will not leave your backers behind.
Always Deliver On The Promises
It is very important to deliver on your promised products and rewards. It sounds easy to do by there are dozens of successful crowdfunding campaigns that didn’t deliver. With a successful project, you show everyone you are capable of fulfilling your promises. This is great since it will benefit future crowdfunding campaigns that you will run.
The problem with crowdfunding is that it is very dependent on the goodwill of the public. Your product may be great, and the idea behind it sounds, but if you don’t get the crowd excited, then you won’t reach your target amount. It would be a good idea not solely to depend on it as a means of funding but to combine it with others so that your target amount would be much lower. Consider your approach and increase your chances of success with the tips above.