Crowdfunding Marketing

 

Introduction

 

The difference between crowdfunding success and failure isn't just about a great idea (although that helps!).  It's about a carefully thought out and well-executed crowdfunding marketing plan.

 

The myth that crowdfunding is a magic bean that instantly draws thousands of strangers’ dollars to your idea - just by publishing it - is entirely false.  Behind every successful raise is a great crowdfunding marketing plan with a notable effort by the founders.

 

In this section we'll provide an overview of what a typical crowdfunding marketing plan entails, how to prepare for it, and what kind of effort to expect to have to put in throughout the campaign.

 

Key Topics:

 

- Preparing to Launch

- Developing a Crowdfunding Marketing Plan

- Ongoing Effort During a Campaign

 

Preparing to Launch

 

The best crowdfunding marketing campaigns are planned out long ahead of their launch, so that proper resources may be aligned.

 

For example, does anyone know that your campaign is about to launch, or are you waiting until you launch to tell anyone?  Campaigns tend to be confined to fixed windows, from 30 - 90 days, leaving very little time wait until after the launch to consider your plan.

 

There are a few things you must do to be well-prepared for your campaign:

 

Inform Ahead of Time.  Tell your closest supporters ahead of time that your campaign is going to launch.  You can talk about the product itself without having to focus specifically on the fundraise.

 

Early Media Outreach.  The media is swamped with eager entrepreneurs pitching products.  Therefore it will take some time to get on the radar of most journalists, so you'll want to begin this process ahead of your launch.  (We'll talk about this more in a moment).

 

Expand Your Network.  A big part of your success is tied to the network you build, from social media to good old fashioned emails.  Be sure to focus on growing your network ahead of your launch so you increase your reach.  Add friends on Facebook, followers on Twitter, connections on Linkedin and so forth.

 

Lock Down Early Backers.  Upon launch you want to be sure you don't start at "0% Funded".  Get commitments from early backers who will back the project the moment you launch.  That way you can demonstrate momentum right off the bat.

 

None of these tactics are particularly hard, but they are incredibly important to do well ahead of your launch.  Upon launch, you'll want to focus on rallying 2nd and 3rd tier connections for support, not telling your close supporters for the first time!

 

Developing a Crowdfunding Marketing Plan

 

Just like any other campaign, a successful crowdfunding marketing plan is a well designed strategy that employs a number of tactics - in parallel.  In this case, those tactics need to all be executed within a short window, so planning is imperative.

 

Evaluating Your Network

 

Crowdfunding is really all about marketing to your network.  Therefore your goal is to approach your plan as a way to gain access and support from each successive tier:

 

First Tier Connections.  Close friends, family, and colleagues.  People that will support you because they want to see you succeed, but also will be your biggest promoters to their friends.

 

Second Tier Connections.  Friends of Friends.  These tend to be people you barely know, but because they have a mutual connection, will enjoy a level of trust with you.  They may also be customers or followers that you have developed over time.

 

Third Tier Connections.  Basically totally strangers who likely hear about you through a combination of media outlets, social media, and XYZ.

 

Key Outreach Tools

 

Different tiers will require different outreach tools to garner support.  Your crowdfunding marketing plan should include tactics targeted toward each tier in parallel, with the hope that some overlap will be helpful.

 

Personal Email.  Without question, personal emails written to your closest first tier connections are always going to be the most effective.  The challenge may be that you only have a limited number of personal connections, so while this is effective, it may be somewhat limited. {In most cases, entrepreneurs have 500-1,000 in their Google / Yahoo accounts, ready for export.}

 

Newsletters.  Many people have developed some sort of newsletter following over time, whether it's about product updates, personal commentary, or other outbound updates.

 

Social Media.  The king of crowdfunding marketing.  The beauty of social media isn't how many people you can reach, it's how many people can share your message through their network.  Even if you don't have a strong following on Twitter, Facebook, or Linkedin, your friends or supporters might.  Therefore it's important to understand how your message can be shared externally.

 

Social News.  Whether you use social media or not, Social News sites offer an entirely new network to reach.  Popular sites like Reddit draw tens of millions of visitors across thousands of topic areas. While you don't want to be caught "pitching" your product, there are ways to stay engaged in the conversation that lead to product mentions.

 

Media Outreach (PR). The media a wonderful way to reach third tier connections, however it is the most challenging to rally unless you know who to talk to and how.

 

Cost Per Click / Paid Ads.  Small, targeted paid advertising campaigns can be a great way to plant the seed of your idea into networks outside of your reach.  The benefit is they are easy to setup and test.  The downside, of course, is they cost real money.

 

There are a few other tactics like creating viral videos that have been known to be effective, but the tactics we discussed here are the primary building blocks.  If you want more detail on how each works, simply click the appropriate links.

 

 

Effort Required During a Campaign

 

The amount of effort required for a particular campaign is largely determined by two things - the size of your existing network and the size of your target raise. Some people have large established networks through existing customer channels or social media followings.  This makes it a lot easier to reach out and gain support. Most have a small following and therefore will need to work harder through outbound channels like Media Outreach to drum up interest in the crowdfunding campaign externally.

 

Time Investment by Raise Size

 

Less than $10,000.  The average rewards-based raise (across all platforms) is about $6,000.  The reason that this is the average is because that's about how much financial support most people can garner from their close friends and contacts.

 

Typical Time Investment - At least an hour per day, mostly spent updating emails, personal social networks, and rallying friends of friends.

 

Less than $50,000.  Once you graduate to north of $10,000 you'll need to access more than your personal network.  Often this will be prospective customers whose commitments will add up quickly.  This will mean also using tactics like targeted media outreach, activity on social news sites, and perhaps a small paid ad campaign in some cases.

 

Typical Time Investment -  About 1 - 2 hours, depending on how much time you put into media outreach.

 

More than $50,000.  A large rewards-based campaign with a large goal requires some serious effort.  In addition to your personal first tier and second tier connections, you're relying on third tier connections.  That means a dedicated focus on media outreach and likely a targeted paid campaign since your goals will likely support it.

 

Typical Time Investment - At least 2 - 3 hours per day, similar to if you were already in business selling the product.  At this level you are acting as if you're already "in market" and managing your crowdfunding marketing like a regular marketing campaign.

 

Summary
 

A successful crowdfunding campaign can change the trajectory of a startup. The results are worth the work, whether you are a successful or not. Preparation, development, and follow through are the three things that separate a successful raise from the many that stall out.