Here are some tips for entrepreneurs considering the ‘reward crowdfunding’ route:
First, choose the platform that makes the most sense for your project: Choosing a platform for your project is the first major decision you need to make in relation to your actual campaign. There are many different options for crowdfunding platforms, so it is important to consider each platform as it relates to your project, specifically. An important element to consider is where you will find your largest number of backers.
Band Industries’ team behind the Roadie guitar tuners has had a good run with crowdfunding campaigns, with 4 successful crowdfunding campaigns to date. In their case, the company team knew that it was looking to reach an American market, so they chose Kickstarter. Now, Band Industries also runs extension campaigns on other platforms like Indiegogo, to tap into different communities.
Secondly, decide on your goal, or the funding amount you are looking to raise: Be reasonable: meeting that target will be crucial and an indicator of whether you have some market validation, and by extension, whether you should continue with your product. Having a clear reasoning for the target goal and amount is very important, so study that carefully.
Take into consideration initial product, team, and marketing costs. A starting point could be to identify the price per product – usually, your production cost x 10. Build on this to identify the amount you need. Marketing is central to the success of your crowdfunding campaign. Set up a project and communication plan for your campaign in advance.
Some important aspects to consider include:
Creating a compelling video showcasing all the future features of your project. The video should present a clear look-alike of how you intend your product to look like, when you are done with the fundraising and actually distribute the finalized product to your backers.
Building your mailing list. To do so, plan for sign up teaser campaigns that promote your product and engage potential backers around a sign up call offering an ‘early bird’ notification to alert them that the crowdfunding campaign will be going live.These teasers should drive early sign ups and will give you a pool of potential backers to tap into once you launch your campaign.
The best way to go about this would involve: Leveraging your social media platforms, your network, and any other channels to create a buzz and ensure maximum participation in your crowdfunding campaign as soon as you announce the launch.
Overall, be ready to spend online to build awareness and generate early sign ups. Plan for a media and PR campaign a week before the campaign launch. Reach out to specialized media platforms covering your industry, where you’re likely to find your target audience.
Overall, make some noise and get creative with your marketing strategy! For example, the Roadie tuner team built a chromatic tuner application that they made available for download on the App Store. Offering this app for free allowed them to generate qualified leads for their hardware product and identify potential backers that would be ready to invest once the campaign launched.
A final word of advice:
Crowdfunding is a powerful marketing tool for your product and current (or future) company. If you are not ready, no one will see or believe in your crowdfunding campaign. So make sure you prepare months ahead of clicking that “Create Campaign” button.
Next - let’s look at key aspects to keep in mind as you prepare your crowdfunding campaign.