What is CrowdFunding? (II)

In this second blog entry dedicated to crowdfunding, we break down the keys to success to carry out a good crowdfunding campaign.

Keys to the success of a crowdfunding campaign: the idea

• It should be original and presented in an appealing way.
• We shouldn’t cut corners when it comes to explaining the idea, particularly through video, text and images in the crowdfunding campaign.
• The motivation for making it a reality should be conveyed; think that many funders are going to collaborate to help you as an entrepreneur to make your ideas a reality.
• Consider whether you should openly share it or protect it. At Lánzanos, we recommend that you share the idea openly because of the benefits this can represent at the dissemination and collaboration level.
• Try to have a prototype or beta of the product to help people understand better (the minimum viable product or MVP).
• This is what motivates you as an entrepreneur to work hard to make the project a reality.
• If your idea doesn’t fit with crowdfunding, try doing a spinoff, that is, an adaptation of the idea that might make more sense in the market or be better-received by your target audience.

Keys to the success of a crowdfunding campaign: marketing

• Write a press release that describes the motivation behind and values embodied in the project.
• Select the media outlets to which to send the news (if they ignore you, be insistent).
• Talk to bloggers and influencers on social media to get them to help you spread the word about the campaign.
• Set up a landing page that explains your project, start a blog and social media channels.

Everything has to be planned before the campaign is launched so that it makes an impact from day one.
Cover all the aspects of marketing:

1. Content-based online marketing

Disseminating quality content that will be useful to your community will allow you to enhance your image and personal brand. Of course, by doing so, you will also increase your conversion rate and get more contributions. Use all the tools you can and reach people through the maximum number of channels possible:

The blog where you tell the world about your idea: This is one of the most important elements of your campaign. In the following sections, you’ll find tips that can be very useful.

• Search-engine marketing
• Marketing on social media sites: Use them to find your funders
• Get recommendations from influencers
• Be proactive to find your audience
• Use search engines
• Segment your audience and empathise with it
• Get the funders to spread the word about the project
• E-mail marketing
• Affiliation marketing
• Mobile marketing

2. Offline marketing and communication

Online marketing will enable you to reach many people at a very low cost. But you shouldn’t forget about traditional marketing and its advantages. The fewer screens there are between your target audience and you, the greater the affinity and better the results you’ll achieve. You can use many actions:

• Advertising
• Organisation of events
• Organisation of contests
• Organisation of courses
• Public relations with the media: Talk to the local media in your area, both generalist and specialised in your subject area. The latter can give you great results. To reach the media, create a good press release and try to give interviews.

3. The marketing campaign: public relations with blogs and influencers

• Better that others talk about you, you’ll have more credibility
• They already have an audience
• Get to know them by first and last name and interests
• Look for their benefit as well
• Volunteer to be interviewed by them
• Offer content collaborations
• Find them on Google and social media

4. Preparation of the marketing campaign: networking

• Participate in all types of events in your sector
• Achieve a space of visibility for your project
• Give a talk
• Hand out stickers, cards and flyers
• Work the pre- and post-event phases (business cards)

Keys to the success of a crowdfunding campaign: community

• Involving people in the campaign is your greatest challenge and the thing that can bring you the most success.
• Get people to feel like participants in the idea, to make them want to help you make it a reality.
• You have to transmit your motivation with the idea, they have to see that you’re 100% committed to the project.
• Help them share it on their social media and on their blogs, even ask for their help to spread the word: foster engagement.
• Try to personalise the campaign so that everyone feels inspired to participate.

Keys to the success of a crowdfunding campaign: the rewards

• If you want your funders to be generous with you, you have to be generous with them.
• Define many types of rewards so that every funder can find one that’s right for them.
• Use physical and also emotional rewards.
• Try to get people to involve themselves in the project through the rewards.
• Offer rewards that represent an experience.
• Define rewards so that companies can also participate in sponsor mode.

Types of rewards that you can include in your crowdfunding campaign

• Donations.
• Advance purchase of the product or service: the initial reward is to be able to enjoy the specific product you want to fund, whether physical or digital (film, book, videogame, disc, etc.), before it is released to the market.
• Discount for the purchase of the product or service: this type of reward works very well if you use it on a complementary basis. No one is going to contribute if the only reward is to spend more money, even with a discount. That is, you should offer a reward and complement it with a discount.
• Personalised product or service: by personalising the reward that you give your funders, you make the person who collaborates feel privileged for doing so.
• Experiences: you can also offer them invitations to product presentation events or diverse functions. These types of rewards are also important for funders.
• Involvement: let them participate actively in the development of your product or service once they have contributed. On many occasions, people invest their money as a way of feeling part of something.

Tips for defining the rewards in a crowdfunding campaign

• The rewards are what we offer in exchange for the contributions people make to support our project.
• It’s very important to properly define the rewards so that people feel motivated to collaborate and, especially, so that they see that they are being fairly compensated for their contribution.
• We shouldn’t settle on a single reward; we should be creative and look for other ways of fostering people’s collaboration—for example through personalisation of the product or other ways of making the people who collaborate feel privileged for doing so.
• One of the most frequent rewards is to give away merchandise or invite them to participate in product presentation events.

Keys to the success of a crowdfunding campaign: the video

• This is the basis of the communication and therefore has to be very well done.
• The entrepreneur has to appear expressing the reason for the project.
• Explain how the idea occurred to you and the problem it solves.
• Describe in detail what the product consists of and how it works.
• Inform people of how they can participate in the campaign and inspire them to become a participant.

Tips for producing the project presentation video

• Video is taking on an increasingly important role on the Internet, and crowdfunding is no exception. It’s worth your while to dedicate time and resources to making a good video that perfectly represents the idea and the need for support to bring the project to fruition.
• The video should be produced as professionally as possible, but it also has to be personalised to the project promoter. This is what is going to generate affinity with people so that they want to support the idea.
• The promoter of the project should appear in the video talking about the idea and asking people to support it through crowdfunding. It should also provide as much detail as possible about the product, either in the form of the prototype or digitally created drawings.
• The video should also call on people to support the project by sharing it through social media.

Keys to the success of a crowdfunding campaign: the creator

• One of the greatest motivations for people to participate in a crowdfunding campaign is to help entrepreneurs make their ideas a reality.
• You have to put all your information, experience, training, social media links, etc. in the fact sheet about the creator.
• Cultivate your online reputation, particularly work to have a good LinkedIn profile and interesting activity on Twitter.
• Build a personal brand, it will be very useful for you and not just for crowdfunding.
• Personally answer all questions and explain anything people don’t understand. Make all communication personalised.

What is the minimum amount I should ask for in a crowdfunding campaign?

• Calculate all costs for putting your product on the market: design, manufacturing, etc. Include the cost of your time.
• Take the platform’s commissions and payment method into account.
• Keep in mind that you’ll have to declare VAT and income tax (as a freelancer) or corporate taxes (as a company).
• Consider the costs of the campaign (video, marketing, etc.)
• Decide which production costs for the product you are going to apply to the campaign.
• Don’t set a very high minimum, to make it achievable; this will help to drive the campaign’s fundraising even more.
• The campaign can generate profits, but that shouldn’t be the priority.
• Calculate several scenarios so that you don’t get burned by the production and product delivery costs.

How long should the crowdfunding campaign last?

• It includes the preparation and post-crowdfunding phase. It should take you between 3 and 6 months in total.
• Keep in mind that preparation of the campaign will take you at least 1 month.
• Calculate very carefully the time you need to put the product on the market and deliver the rewards.
• The public campaign should last more or less 1 month; if it goes on longer, people will lose interest.
• The first day of the campaign, you should use all your power at the communication.