Are you thinking about raising money for your brand through crowdfunding?
Crowdfunding is a highly effective way to obtain funding for your business and create more exposure for your brand. However, if you are not as well-versed in the art of crowdfunding, there are some things you should know.
In this post you will learn four crowdfunding tips that will help you ensure that your campaign is a success. Let’s get started.
Understand the Benefits — Beyond Money
This point is always a shocker for people who aren’t experienced in crowdfunding. Nevertheless, it’s true — crowdfunding offers many more benefits.
One way crowdfunding helps your business is that it makes it easier to understand your prospects and customers. When you use this method of funding, you’re not dealing with investors — you’re dealing with the actual people who will use your product. This means you can use your campaigns to see what your audience really wants.
Another benefit is that it gets your audience more engaged with your business. People who give to crowdfunding campaigns aren’t investors — they have no ownership in your company. They just enjoy your brand and want to support it. This means they will be more willing to talk to their friends about your products and services. They will be more likely to sing your praises on social media. It’s a great way to create evangelists who will share your brand with the people in their networks. When you understand that crowdfunding isn’t just about money, you will see how to leverage it as a way to learn more about your customers and gain more exposure for your brand.
You Must Choose The Right Platform
When you’re implementing a crowdfunding campaign, it’s important to choose the right platform. You don’t want to just choose whichever one sounds nice. You want to use the one that complements your business.
There are several different types of crowdfunding models to choose from. Make sure that you are choosing the type of model that works best for your business. Here are some of the models:
- Rewards: Sites using this model will enable you to offer certain non-financial perks to your backers (people who give you money) depending on how much they contribute.
- Equity: This model allows backers to make “micro-investments” in companies that are not listed on the stock exchange.
- Donation: This model is usually used by organizations supporting a social cause or religious initiatives. In this case, your organization does not offer any incentives or perks.
- Lending: This is an easy way to obtain a loan without going through the banks. This model allows backers to lend a small amount of money to the organization. They are repaid with a fixed rate of interest.
- Hybrid: This model is a “mish-mash” of the rest of the models. It could incorporate some or all aspects of the other models.
If you want to implement a successful crowdfunding campaign, figure out which platform would work the best for your brand.
Becoming successful at crowdfunding means being able to grab potential backers’ attention and convince them to contribute to your project. This means there are components of marketing involved in the process. This is where video comes in.
Studies show that visuals are a more effective way to get your message across. Put simply, if you’re not using video in your campaigns, you’re leaving money on the table. Effective use of videos will boost your results.
You Need To Know Who You’re Targeting
One of the most important keys to a successful crowdfunding campaign is to know the people you are targeting. You must have an intimate understanding of your ideal target market — otherwise you might waste time and resources marketing to people who don’t want or need what you’re offering.
Using a buyer persona can help you create a profile of your target audience. A buyer persona is a marketing tool that enables you to become familiar with the different characteristics of people who fall into your target audience. Knowing this information will make it easier to more effectively target your marketing efforts to people who actually need your product or service.
Crowdfunding can offer tons of benefits to those who learn the fundamentals of creating an effective campaign. If you follow the tips given in this post, you will be well on your way to raising more support for your business.
Crowd Paper Cutout Photo via Shutterstock
More in: Crowdfunding
When it comes to benefits beyond money, keep in mind that people like to be “first” on things and therefore, just by letting them get their hands on something “first” can be a big value.