The secret to crowdfunding is in the name - you need a crowd in order to go crowdfunding.
Sounds basic but this is the main reason why crowdfunding campaigns fail. The lack of an engaged crowd of willing backers. In fact, well over 70% of rewards based crowdfunding campaigns do not make it. Many people come to me and say why is no one backing my crowdfunding campaign?
One main reason is that people expect the crowdfunding website where they have set up their campaign to bring in the crowd. There is also somehow the expectation that there are people all over the internet looking for campaigns to back. That is definitely NOT the case.
There are however ‘repeat backers’ - people who like to back certain types of products or invest in certain types of businesses. These repeat backers will never make up a significant part of your target and you will be lucky if they contribute more than 5% of the overall total you are wanting to raise.
That doesn’t mean they can’t be valuable, and you should find out who these repeat backers are. Check out the various tools available that will help you identify repeat backers as part of your strategy to build your crowd before you go crowdfunding. Once you have identified who they are they will form part of your crowd and you can add them to your email list and get them excited about your upcoming crowdfunding campaign.
Nearest and Dearest
Yes, your family and friends are crucial to your crowdfunding success.
I know, I know… most of us do not want to approach our family and friends. Afraid to ask? Fear of rejection maybe?
There is a great TED talk where Amanda Palmer, a singer/musician (who raised well over a million dollars on the crowdfunding platform, Kickstarter), explains how to overcome the fear of asking. Believe it or not it does not come naturally to most of us and with her persuasion you will be able to do it with ease. She has even written a book on the topic called ‘The Art of Asking’ if you need additional inspiration.
Start now by compiling an email list of all the people you know personally. Reach out to them by phone. Do what you have to do to get them on board. Their momentum in the early stages of the campaign will prove crucial to your overall success. Prepare them now on what’s to come. You will not regret it - they are a crucial part of your crowd.
People you Know
Yes - you have met many people in your lifetime - hundreds, if not thousands. We are connected to them all over the place. Many will be connections on Social Media, so get busy and start connecting with them again. Telling them about your campaign is an easy way to open a conversation, no matter how long ago it was when you last contacted each other.
Make sure that during your conversations that you somehow get their email address. Have a landing page somewhere on the internet where you can send them. Explain to them that you need their email address to notify them as to when you launch.
Email, email, email! I have found that it is the secret sauce behind the success of a crowdfunding campaign. Emails convert more people into backers than all of your other Social Media combined many times over.
So, don’t forget to collect email addresses from everyone you know…
People you do NOT know – part one
Strangers do not back crowdfunding campaigns. So how do you get them involved?
This part of your crowd is broken up into two groups.
The first group of people you do not know are friends of the people you do know. That is why it is so important to get your family and friends on board early in the launch of your campaign. After your friends and family have backed your campaign it is up to you to go back to them and ask them to get their friends to do the same.
Can you see what is happening here? You do not know them, but these new backers know your family and friends. They will back you based on the encouragement and recommendation from your family and friends.
People you do NOT Know – part two
It is now time to borrow someone else’s crowd!
This second group of people you do not know belong to someone else’s crowd, let’s say an influencer. These influencers are varied and have spent years building up their own crowds. These influencers could be bloggers, journalists, You-tubers, Instagrammers for example.
It is now time for you to identify influencers who have built up crowds that you think will be a good fit for your crowdfunding campaign. There are many online tools out there that you can use to identify ideal influencers that you can reach out to.
This is called ‘third party validation’.
Just one blog post, video, post, or article can generate enough traffic to your campaign to successfully launch you way past your target. I have seen this happen many times. It is up to you, however, to develop a relationship with these influencers long before you go crowdfunding. You do this so that when the time is right, you can ask them to put your crowdfunding campaign message in front of their crowd.
It’s at that point that you can sit back and watch the magic happen.
You can now see the importance of building a crowd BEFORE you go crowdfunding and there are many ways of doing it. Make sure you add this task to your Strategy Plan.
There are many success factors that you need to have in place before you go crowdfunding.
Setting up, growing and engaging your crowd is the most important.
Take action on growing your crowd today!
The Swindon and Wiltshire Growth Hub is delighted that Anthony is sharing his insights and knowledge within three webinars delivered as part of our This Way Up: Leadership, Digital, Finance programme, which has been funded by the Department of Business, Energy and Industrial Strategy.
Join us to find out why there has never been a better time to consider crowdfunding than now. Watch live or ‘on demand’ to find out the different types of crowdfunding campaigns, how to create a successful campaign and utilise a funding source which now funds more activities than Venture capital.