Money to crowdfunding campaigns is doubling every year and but nearly two-thirds of campaigns still fail. What does it take to launch an effective crowdfunding campaign?
Why are there only six habits of effective crowdfunding instead of the traditional “7 Habits?” Crowdfunding can be easy. You don’t need seven habits but you do need to follow the big six. Check out the infographic below for the skills you’ll need for crowdfunding success.
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The Habits of an Effective Crowdfunding Campaign
Successful crowdfunders share with others and have an active social network. They share their emotions and their excitement. Data shows that campaigns where the founder had just 10 Facebook friends, the odds of making a $10,000 funding goal were just one-in-eleven. For founders with 100 friends, the odds jump to one-in-five.
Don’t confuse a large social network with an active one. Touch base with everyone in your social network before the campaign to reestablish the relationship. Ask about what they have been up to and really listen. Share your excitement about the crowdfunding project and how they can be a part of it. Check out our previous post on how to build your crowdfunding outreach list including journalists, bloggers, influencers as well as your own personal network.
The time it takes to keep your crowdfunding supporters updated through social media can seem like a part-time job. You should be sending out social media updates on your campaign every day or at least every few days to keep people motivated and engaged to spread the word. This becomes much easier through social media management tools like Hootsuite. Hootsuite Pro lets you connect all your social media accounts to one page where you can schedule messages and manage all your crowdfunding updates.
People think effective crowdfunding is simply posting a campaign on Kickstarter and maybe tweeting it out to their network. Crowdfunding is so much more. In fact, I know a lot of small business owners that have completely revamped their marketing strategy around crowdfunding. An effective crowdfunding campaign involves offline and online marketing. Successful campaigns need to be able to share their passion and drive visitors to their page from every imaginable outlet.
By tying in an offline welcome pack, a series of emails, a newsletter and media outreach, one charity was able to quintuple its donor file and increase retention to 70%.
Effective crowdfunding means building a team to help you with your quest. While the project may be your brain-child, realize that it has the potential to be bigger than yourself and will benefit from a team effort. One of the biggest surprises crowdfunders run into is the amount of time an effective crowdfunding campaign can take. The outreach, networking and general administrative things you will need to do while your campaign is live can easily take 20 hours or more each week.
Slava Rubin, founder of IndieGoGo, states that teams raise an average of 70% more money than campaigns run by a single person. Putting together a team of your most passionate supporters helps in two ways. It will bring expertise and skills from the experience of your team and will spread some of the work around so you’re not overworked.
You should try to get your team to help manage the crowdfunding campaign but there are going to be tasks that need an expert. Fiverr.com is a great resource for getting small projects done. The site is a freelancer job board where people posts jobs they will do and for how much, usually starting at just $5 for a basic job. You’ll find everything from graphic design to tech help and even virtual assistants.
Only your mother is going to help your crowdfunding campaign without being asked. If you are not ready to ask people for help, sometimes asking more than once, then you need to rethink whether crowdfunding is for you.
According to the Public Management Institute, not asking is the single biggest mistake in fundraising. Only about half (56%) of households say they have been asked to give to at least one non-profit, of these, 95% said they gave to at least one.
The good news from this is that, when you do ask for help, people will be enthusiastic about being a part of your campaign. Start off with an email or a quick phone call. If this goes unanswered, send out another email after a week. Your email might have gone to the junk mail folder or the contact may have just forgotten to respond.
There are nearly 8,500 projects right now on Kickstarter alone. A great product will not sell itself and you need to get creative to get people’s attention.
About 30% of supporters on Kickstarter are repeat backers, they regularly support multiple campaigns. Asked how they decide which campaigns to support; 27% said they support campaigns that make them laugh, 15% support campaigns that make them think, 42% support campaigns with cool products and 16% support campaigns that evoke other emotions.
Your video and campaign page is where this is going to happen. Even if your crowdfunding campaign is for a business product, it fulfills a need for your customers. Tap into that need and describe how your project affects customers as well as the people around them. Use as many senses as possible to relay this; audio, video and even touch, feel and smell through descriptive language.
So much media attention goes to crowdfunding success stories that people don’t realize how much goes into an effective crowdfunding campaign. Crowdfunding is not writing out a few words and waiting a couple of months for your campaign to end. You’ll need to put together a complete strategy from outreach and building your online presence to the logistics behind fulfilling your reward promises.
Campaigns that raise no money before their launch have an average success rate of just 15 percent. For campaigns that raise 5% of their goal, the success rate jumps to 50 percent.
Following these six habits won’t guarantee your campaign is funded but it will go a long way to developing an effective crowdfunding campaign that meets your goals. Don’t forget about the other benefits of crowdfunding like free marketing and customer loyalty that these habits will unlock for your small business or cause. Check out Step-by-Step Crowdfunding to take your campaign beyond these six habits and get the complete process from pre-launch to leveraging your campaign’s success.