How Brands Use Crowdfunding as a Marketing Tool
Whether you already have products and/or services on the market or aim to develop your portfolio via crowdfunding to start things off, marketing your intentions in the right way will make or break your plans. According to Startups, it takes about 11 days to prepare a crowdfunding campaign, while campaigns with teams behind them raise 38% more funds than those created by solo entrepreneurs.
If you have the right mix of originality, creativity, and utility for a specific target audience, crowdfunding will indeed allow you to raise resources quickly in order to fulfill your plans that much faster. However, “raising funds” is easier said than done, which is what we will take a deep dive into the following segments in order to define how brands use crowdfunding in marketing.
What Crowdfunding Stands For
Before we go any further, let’s quickly circle back and discuss what “crowdfunding” really represents in practice. Small businesses, eCommerce platforms in early development and solo entrepreneurs often don’t have the resources required to make their dream business come true.
Crowdfunding thus represents a way for individuals and small teams to raise money through popular online platforms such as Kickstarter and Indiegogo with great success. Coupled with writing platforms such as Evernote and Trust My Paper, you can create your own crowdfunding campaign and publish it through self-managed marketing or dedicated websites as we’ve previously mentioned. Everyone loves the underdog and crowdfunding can help you achieve that status while also providing you with a way to raise funds and gain public awareness for your business idea quickly and easily.
Advantages of Using Crowdfunding in Marketing
Now that we have a clearer idea of what crowdfunding stands for, let’s talk about why you should use it for your benefit. Raising money from third-party stakeholders for an original but unproven idea or product will do several things for your brand.
For one, you will earn a lot of positive exposure and early adopters for your idea who will definitely end up with your product once its development is done. These individuals will have a stake in your success since the quality of the product they receive will be in direct correlation with the number of resources you raise during the campaign.
Platforms which specialize in writing, such as Grab My Essay and Grammarly, can provide you with additional proof of quality by allowing you to write the content for your marketing efforts. As such, you will be able to create a form of “snowball effect” with your crowdfunding campaign if you market it properly, bringing several advantages to your brand as a direct result:
- More brand advocates and loyal customers early on
- Early creation of social proof and online validation
- Outsiders’ perspective on your idea with feedback and comments
- Less risky than traditional fundraising (bank loans, B2B loans, etc.)
Define the Pitch
The first order of business in terms of marketing your crowdfunding campaign is to define what it is that you are raising funds for. Do you intend to develop a new product lineup, expand your service portfolio or add new eCommerce features to your website? Who is the crowdfunding campaign’s product designed for and how does it solve a pressing customer problem compared to other brands on the market?
These are essential questions which will help you define the pitch of your crowdfunding campaign before you go live. Make sure that you are clear on what it is that you want to accomplish with your marketing and the right target audience will flock around your crowdfunding campaign quickly and efficiently.
Create a Timeline
One of the most important aspects of successful crowdfunding is to provide your audience with a development timeline. Samantha Brook, Chief of Finance at Best Essay Education spoke on the topic recently: “Public funding campaigns will often require you to provide a proof of concept in addition to a well-established delivery timeline in your initial pitch. After all, you are effectively asking for third-party resources for a “may-or-may-not succeed” product or service upfront – make sure that you are concrete about it.”
Whether you aim to grow an eCommerce platform for their benefit or develop a physical product and ship it to their doorstep as part of crowdfunding fulfillment, timelines provide backers with a sense of security. A well-established timeline, with milestones, deadlines, and detailed development notes will also serve as an effective marketing tool for your campaign.
Allow for a Variety of Payments
Limiting your crowdfunding campaign to one or two payment types is a tactic bound for failure. Given the nature of your marketing campaign, you should enable as many payment options as possible for potential backers to opt for.
Options such as PayPal, credit card and even cryptocurrency should be on the table for your crowdfunding campaign. This will allow you to attract backers from different countries and with a variety of background profiles whether they are professionally involved with your industry or engage with it as B2C stakeholders.
Offer Additional Stretch Goals
The best way to entice backers into additional funding is to offer stretch goals for your initial development timeline. For example, if your aim is to create a physical product for shipping, a stretch goal can be “free shipping” or “additional copy of the product” at some point on the timeline.
You can use writing tools such as Studicus and Hemingway to write creative stretch goals which will encourage users to back your campaign. Stretch goals serve as a great way to raise additional funds after the initial sum has been collected but the campaign is still ongoing. Use this opportunity to not only raise more resources but also to take your idea further and redefine it as a more complete product.
Provide Frequent Updates
One of the worst things you can do in terms of running your crowdfunding campaign is to go “radio silent” with your backers. The same rule applies for the general audience who may still want to back your campaign but are curious about your lack of updates or news over time. Make it a habit to publish new information and data about your project on a weekly or bi-weekly basis.
As small or insignificant as it may seem from your perspective, this type of forthcoming communication will allow backers to rest assured that you are still developing the promised project. Likewise, the updates can be used to collect critical user feedback and data in regards to the path you took the project in. This will help you create a much more satisfying final product and gain much-needed positive brand recognition from the public at large – keep your backers in the loop.
Follow Up on the Campaign
Lastly, the most essential aspect of a crowdfunding campaign is to follow up on your initial promises and deliver the final product. Crowdfunding fulfillment is unfortunately not an industry standard since many campaigns fail, breach deadlines or deliver products of very poor quality in the end.
Shipping Crowdfunding Backer Rewards
Luckily there is Floship. We specialize in Crowdfunding Fulfillment and are actually market leader in terms of the number of campaigns we fulfilled. We have a lot of experience in dealing with bulk shipments that need to be pick-packed, dispatched and delivered at the same moment. Projects such as shipping large amounts of backer rewards globally. Crowdfunding fulfillment is different from e-commerce fulfillment as the fulfillment provider needs to have the capacity and experience to dealing with such large undertakings, rather than small order volumes on a day to day basis.
At Floship, we understand that backer satisfaction is highly important. Not just for now, but also later on, your brand will rely heavily on the success of your campaign. Do not make the same mistakes as many other campaign runners and overlook or underestimate your shipping Reach out to us by filling out our custom solution form and we’ll go over your project and our fulfillment solutions together. We furthermore offer a special badge that you can display (for free) on your crowdfunding page, showing potential backers that you got a solid shipping plan and therefore backers will indeed receive what they paid for. Click here to find out more about the Floship Certified Logisitcs Plan.
Make sure that your brand does not fall into that category and instead aim for the highest backer satisfaction possible. This will also help your future crowdfunding campaigns since the positive word of mouth and brand recognition you built up won’t go away overnight.
Funded by the Crowd (Conclusion)
Crowdfunding may seem like an unorthodox idea at first, especially if you never had a chance to partake in one of its campaigns before. However, it can also help you build a much closer and engaged relationship with your customers no matter the scale of your project.
Look for a creative way to present your idea as a crowdfunding project with its timeline, stretch goals and deliverables with the aim to market it as such. In time, a healthy number of backers and PR coverage will follow if your idea is innovative and original enough to warrant monetary support – why not find out sooner rather than later?