Crowdfunding as a Go-to-Market Strategy
Some entrepreneurs believe crowdfunding is simply to post a video of a product with a few different rewards on a platform, and somehow, this will magically compel millions of customers to have an interest in backing a product. This belief is entirely false! The secret behind every successful crowdfunding campaign is a marketing strategy and its execution. It is important to plan long in advance before launching a campaign to make sure that the proper resources have been aligned and that the campaign runs long enough to be able to reach its goal.
Every campaign needs a start and end date, so it is important to project the campaign time accurately with action plans and an implementation schedule. It’s better to be conservative than optimistic about this timeline. Testing out customer responses with newsletters, clicks, social media posts, can provide sufficient data to understand your target market and how they respond to different forms of advertising. Timing is key to generate as much traction, hype, and interest as possible before launching a campaign. Collecting emails, hosting and attending events, and engaging face to face with potential customers before and throughout the campaign can boost chances of success. Be realistic on the timeline. A campaign targeting $400,000 should not estimate to run the same amount of time as one targeting $4,000, it is better to run for a longer period of time and pass your target than to not reach it.
Digital media is swamped with eager businesses advertising their products. Standing out from advertising noise takes a lot of effort. Create interest in the product and campaign with friends and family through newsletters, blogs and social media without focusing specifically on the crowdfunding campaign. Build an initial customer base to increase your reach. Create social media pages for your company and grow your network by taking advantage of friends of friends. Upon launch you want to lock down immediate backers to demonstrate momentum. It is important never to show “0% funded”. Take advantage of different forms of content such as interactive videos, blogs and podcasts to engage with different audiences, and hopefully make your campaign go viral.
Different networks require different reach. Friends, family and colleagues are the most important audience to secure since they are influencers and advocates to their friends and family. These will be people targeted through newsletters, personal emails, and events. Friends of friends will be people interested in the product and will trust backing your campaign because most of the time it will come from a recommendation. They will probably show up at campaign events invited by acquaintances, word of mouth, or organic social media outreach. Strangers will be the people targeted through social media and digital advertising. Targeting this audience will require crowdfunders to spend money on PR, social media ads, digital ads, and social news. Campaigns usually spend around 10% of their crowdfunding target on Marketing and PR for this group of people. Since strangers are a large part of any business’ target market, it is important to spend money to make money.
Startups are all about the money, however, raising money as a small business is always a challenge. Rewards crowdfunding offers a way to reach customers and take a product to market without having to go through the traditional seed, angel and venture investment route. Through crowdfunding, businesses are able to reach customers around the world proving their concept and target audience. The difference between a successful crowdfunding campaign and a failure isn’t the idea or the product itself, it’s the marketing strategy and its execution. A successful crowdfunding campaign can turn a startup into a successful business. Even though crowdfunding takes a lot of time and effort, the results are worth the work. It is important to do the work to avoid setting a campaign up for failure.