What You Need to Know About Crowdfunding | Products to Profits
What is making crowdfunding successful now? Is it a great marketing team? Tons of backer incentives? Or just an amazing product?
The answer is: "All of the above!" Campaigns that have been successful in the past have gotten there through implementation of an effective strategy. Teams behind these projects create and maintain key driving forces of these relatively short campaigns. CEO and Co-Founder of the LaunchPad Agency, James Little points out, "The three P's of crowdfunding are "Preparation, preparation, and preparation.'
We cannot stress enough how important it is to have a strategy and plan in place. When it comes to crowdfunding, there are different types for different desired end results. The first type of crowdfunding is equity-based. This is usually used to raise amounts of 1 million dollars and up. Another, more popular, kind of crowdfunding campaign is gift- or reward-based. This essentially means that your backers will support you in exchange for a gift. The kind of campaign you choose to use should reflect your ultimate goal.
James Little identifies 3 stages of jump-starting a crowdfunding campaign in the following list:
Stage 1: Messaging Workshop - Develop your product's verbal branding and translate this over to everything you do. Consistency is key.
Stage 2: Start off with a bang! - Here's the "Golden Rule": Get 30% of funding within 48 hours of launching your campaign or you are 60% sure to fail. Make sure you secure the support of friends, family, and existing people on your list. It's all about gaining that instant momentum. People are compelled to be on the winning team.
Stage 3: Update your backers regularly - Keep them in the loop about your progress. If there are any questions or concerns, address them as soon as possible. Make it a point to serve them. At the very least, send them a direct message or email.
Once your project has been successfully funded, don't just dive into your business and disappear. Hyper-focusing and shutting out your audience of supporters can be dangerous. Continue to nurture the relationship with your backers and people that have expressed interest in your product.
Also, during this time keep the momentum alive by continuing to spread the word! Use Facebook ads to guide leads to your landing page. Remember to continue posting good news and press about your product's progress.
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Check out our previous crowdfunding posts below: