Crowdfunding has become an increasingly popular approach to raise funds in support of a project to grow your business. Rewards-based crowdfunding, where you solicit pledges from your customers, family and friends in return for special deals on your product or service, is appealing as a debt-free way to raise capital. But there are also other benefits. Not only does using your social and professional networks to gain support for your business goals and engaging your customers in the success of your enterprise can have a long lasting impact on customer loyalty but the process of preparing and conducting a campaign also requires that you “crisp up” your marketing messages and eventually provides you valuable feedback on the appeal of your pitch and your product or service.
Here are a few tips to ensure that your next crowdfunding campaign is successful:
Build a solid network. Just before your campaign launches is not the time to start to engage with your customer community and professional network. Begin to create a conversation even before your business is formed. Ask for input and feedback from friends, family and organizations that share your passion. And make sure to collect the email contact lists for existing and potential customers along the way. Become a subject matter expert about your business or industry and provide tips or helpful information. Create an online identity that draws people to you as someone interesting and engaging. In this way, you will create a loyal following and build the foundations of a tight customer community. A business Facebook page is critical, and depending on your audience as well as the visual appeal of your crowdfunding rewards, a Twitter account, Pinterest, Instagram and a blog are also beneficial.
Be concise. While having a conversation is critical, social media is not the place to write the next great novel. This communication medium is best used for short, pithy messages. So, be clear and be brief. If your product photographs well, then post images (and even include customers in some of them). As we all know, a picture speaks a thousand words.
Tell a story. Once you have engaged your community, tell your network what you are planning to do to grow your business and how their support will make a difference for you. What project goal are your trying to achieve to grow your business – a new location, a new product line? The best description of your goal is one where your customers will see how it will benefit them if you achieve that goal (i.e., a bigger location means more yoga classes to chose from!). But also be interesting and a little entertaining. Between posts with compelling requests for support, include live action video segments of you behind the scenes at your business or photos and videos of customers telling others why they support you. Make it real, make it current and make it personal.
Offer Value. People want to see you succeed, but they also want something in exchange for their support. Consider a variety of rewards that allow many different supporters to participate in your success. Some people may not be able to use or access your business products, so allow them to donate in exchange for a thank you or a shout out. If all your rewards are also currently available in your online store or at your place of business, people will not be compelled to act immediately. So offer new items, exclusive products or early availability. And create some scarcity by offering rewards that have limited supply.
What about that big dollar contributor? Offer something extra special such as an experience or a unique way to mark their support permanently in your business. Conduct a personal class, host a private party, name a product after them, or include them in special “behind the scenes” events at your next launch. There may be very creative and exciting ways to entice supporters to pledge larger dollar amounts.
Share the Love. Once the campaign has begun, work continuously to update your supporters. Tell them how things are going and how to share the story with others. One key to a successful campaign is the volume of “views” your campaign page gets. Campaigns typically raise only a percentage of the total funds from their own existing networks and customers. It is generally matched equally by supporters who are in the extended networks of your contacts. So sharing, reposting, forwarding and retweeting your campaign can multiply your chance for success.
Don’t stop communicating. After you have reached your goal, there may be a temptation to sit back and take a break from the stress and pace of the campaign. Don’t do it. Thank your supporters and keep them updated. Let them know how things are going and what progress you are making. Keep the story alive and cement those relationships that you’ve worked so hard to develop.
There is little that is more satisfying than seeing this kind of grassroots support build and grow around your dreams. While it is hard work to run a successful crowdfunding campaign, the benefits you reap in market validation and customer engagement go far beyond the fundraising result. So jump in!
Have you ever run a crowdfunding campaign to raise money for your business? Share your experience with other makers + entrepreneurs in the comments!
Meet Brenda & Nancy | MoolaHoop CoFounders
Brenda Bazan and Nancy Hayes are CoFounders of MoolaHoop a crowdfunding platform that helps women with small businesses reward their customers and themselves. You can get started at www.moola-hoop.com.