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Online crowdfunding sounds like a no-brainer. Once you have a terrific business idea, your target audience helps you fund the business to get it off the ground. Right? It’s only once entrepreneurs start promoting their idea that the true difficulty of crowdfunding becomes real.
When you consider that only 30 percent of crowdfunding campaigns achieve success, it suddenly becomes apparent that getting others to support your new business concept may not be as easy as the success stories promise it to be.
However, by studying crowdfunding victories that have made headlines over the years, you can give your project an edge that may potentially put you on the path to success for your own crowdfunding campaign.
Here, we take a look at the science of crowdfunding, as we examine similar qualities possessed by successful campaigns in recent years.
Precision targeted for your audience
You may believe that you have the most amazing business idea ever, but only thorough research and testing can determine how your audience will react to your concept. The simple fact is, no amount of promotion or marketing will generate interest in an idea that isn’t desirable.
Make sure your campaign is relevant to your target market’s needs. How will your product provide a benefit or fulfill a need? Your crowdfunders must see your idea as a way to improve the way they live their lives.
For example, UNYQ, which completed a successful campaign on Fundable to the tune of $1.6 million, makes prosthetics and orthotics. The campaign established the company as a trendsetter by offering completely personalized and customized prosthetics, which many backers could see themselves wanting and using to improve quality of life, while providing plenty of self-expression.
A thousand social media fans
It’s always wise to launch your crowdfunding idea to a pre-formed audience. For that reason, the most successful campaigns tend to already have social media fans in place, ready to receive their messaging prior to the campaign’s launch.
Follow in the footsteps of successful crowdfunding by collecting a pre-formed audience of 1000 plus social media fans that can help you spread the word about your campaign and give you a significant boost on launch day.
Not too long, not too short
You never want to limit your campaign duration to a small window, as you could potentially miss out on contributions from backers. By the same token, you don’t want a campaign that goes on for too long, as there’s no sense of urgency for people to back your idea now rather than later. Research shows that the most successful campaigns tend to be around 30 to 45 days.
Multiple reward tiers
The rewards for those who support your idea should be simple and clear. You are encouraged to start small, so be wary not to give too much away to small backers. Instead, focus on the higher-end rewards.
The most successful campaigns tend to have several reward tiers. When creating your reward tiers, ensure that you structure them so as not to alienate any backers in your target market. For example, you can miss out on a lot of funding if someone wants to back your idea for $500, but you only have reward tiers that max out at $100.
It turns out that many successful crowdfunding campaigns have around nine reward tiers, as this is said to strike a good balance without being overwhelming.
Video is said to be the most vital part of your crowdfunding campaign. The video should start with a hook to draw viewers in, such as explaining how you came up with your concept, or how your concept has already changed the life of a few key customers, who you can then introduce in the video’s opening segment.
The call-to-action will then ask backers to pledge while giving them a good reason, such as improving their lives in some way. Most campaign videos tend to be less than three minutes long.
The most successful crowdfunding campaigns offer frequent updates so that backers are kept in the loop of your campaign’s progress. For example, you should provide your backers with updates every time you hit a new funding milestone, through an email marketing campaign.
If your campaign is featured in the press, that also warrants an update. Use word-of-mouth marketing, as well, and share your crowdfunding page with friends and colleagues. Behind-the-scenes videos that showcase how hard at work you and your team are as you gear up for the final funding milestone are also great pieces of content to share.
Incredibly approachable and responsive
In addition to frequent updates, the most successful crowdfunding campaign creators tend to be very interactive with their backers. They do this by responding to comments and inviting questions in the comments section. Receiving and responding to input creates a conversation, which can entice new backers and generate new interest, since people will see how reachable and engaged you are in the crowdfunding process.
The right app
Some campaigns perform better on certain crowdfunding platforms than others, and there are many to choose from. There’s Kickstarter, Indiegogo and Crowdfunder for startups and small businesses; Fundable for entrepreneurs; Seed & Spark for film projects; Patreon for recurring podcasts and TV projects; Fundly for fundraisers; and CrowdRise for charities.
The most successful campaign creators choose their platforms very carefully. Take Aquaforno, for instance, a company that builds outdoor cooking systems. For their campaign, the company chose Indiegogo rather than Kickstarter for a very good reason. Since the company is British, Kickstarter would have forced them to list their project in £ Sterling. However, listing the product in USD was an important factor in the success of Aquaforno’s campaign, so they decided to go with Indiegogo, instead.
A powerful hook
No matter how many benefits or features your crowdfunding concept has, your hook should be simple. Focus on one or two things that make your project stand out, and lead with that. However, keep in mind that having a novel idea isn’t enough these days.
Stefan Loble, who successfully funded his travel clothing company, Bluffworks, on Kickstarter, recommends communicating your passion, which will help you develop authority.
There is much to consider when creating a crowdfunding project. The platform you choose, the timing of your product release – it’s enough to overwhelm even the most ambitious of entrepreneurs. Just remember that you can learn from the success stories that came before you.
Don’t try to reinvent the wheel. Instead, find a crowdfunding project similar to yours to model your campaign off of it, and infuse your campaign with these best-of-the-best qualities to give your campaign an edge as you get closer to your goal.