Fifty Five Plus is delighted to welcome Theresa Manning to share her financial expertise with us. Theresa will write several article in the coming months. Perhaps you’ve heard of the term ‘crowdfunding’ being thrown around, but always thought it referred to some new-age kind of tech speak. Well, think again. Crowdfunding has gained massive popularity and momentum in the last few years thanks to platforms like Kickstarter and Indiegogo, where projects have been known to raise millions of dollars incrowd-funded donations. So what does crowdfunding actually mean, and who can access it? Put simply, crowdfunding is a business template whereby start-up companies/creators ask the general public for donations to provide capital for their ideas. Crowdfunding is an alternative to your typical bank loan or unsecured business loan. By creating a website that promotes their new idea or product, creators will offer special rewards to backers in exchange for their donations. The best part is that literally anybody can start a crowdfunding campaign, but not everybody will be successful. In this article we discuss the key factors in creating a stellar marketing campaign for your project, to ensure the best possible outcome for donaters and investors.
Understanding Your Demographic
One of the key starting points for your crowdfunding campaign is knowing your target market inside out. Your existing network of friends, family, neighbors and colleagues are a great circle of potential influencers and investors to begin with. This network of people are likely to back your ideas with donations and support in the hope that you’ll succeed. The next tier in your circle of influencers will be your social media followers and subscribers, who you can reach out to with targeted posts, images and requests. The last circle (and toughest) will be the general public, whom you don’t actually know, but need to be on board to get your project off the ground. This is where you will need to create genuine storytelling campaigns with the aim of going viral. By customizing the marketing messages you create for each of these different groups, you will create an opportunity for those people to spread the word through their own networks. Don’t forget to connect with all the stakeholders operating in the same industry as your project who might be interested in your idea.
Choosing Your Platforms
To ensure your project is generating the right kind of buzz and hitting your target markets, you need to choose the best crowdfunding and social media platforms for your idea. There are a lot of crowdfunding platforms operating in the online sphere, but we recommend going big (thinkKickstarter, Indiegogo or GoFundMe). If you are looking for something a little more local,OzCrowd are a 100% Australian owned platform dedicated to helping Australian start-ups launch their ideas. If you have the resources, we also recommend engaging with a crowdfunding marketing agency. The Creative Collective are a fantastic Australian based company who offer a range of marketing, PR and tech specialists to hone your campaign to target the right audience. In saying this, you can generate all the marketing buzz you need without hiring an expert.
Before launching your campaign, you need to make sure that everything is polished – your brand, website, databases and social media. If you don’t already have some kind of following, you’ll need to work on this before launching.
Follow other industry influencers, like posts and comments, re-tweet, hashtag, reply to people, tag other people and accounts, share links, and send personalized emails to your database. Growing a community of engaged fans won’t happen overnight – but the great thing is some of your existing followers might have large networks themselves. Getting them to share or engage with your product is simply marketing you can’t buy. One of your most vital social media tools will be professional, polished videos and imagery that tell a genuine story. Eye-catching landing pages and creative are also essential to your campaign. Don’t forget to do polls with your followers to get them involved in the project – ask them for advice on colour schemes or designs. This makes them feel involved and will increase the likelihood of future purchases once you are established.
Understand The Legalities, Finances and Downsides Knowing the tax and GST requirements of money made through crowdfunding is imperative to your business. Understanding whether you are generating income from donation based, rewards based, equity based or debt based funding if your campaign reaches its dollar goals. Just remember that only a small percentage of your fan base will actually donate, so understanding the realistic goals of the capital you need is important to identify. The average rewards-based raise is around $6,000.00 – so don’t set unrealistic goals of $50,000.00 which will do more harm to your campaign than good. Most successful campaigns offer incentives for various dollar donations, but you need to make sure they are valuable and priced appropriately. Starting out low is usually a winner – offer backers the option of only pledging $1.00 (or amounts under $50.00). As the project increases and you keep those initially low backers informed, they are likely to make larger donations.
Check out the success story of the Pebble Smartwatch, who raised around $10 million from a Kickstarter campaign. “I couldn’t have predicted Uber, I couldn’t have predicted Spotifiy or Pandora or any of these apps. I look at this the same way, it’s early days for smartwatches and if you think five, seven years out from the first smartphone, I don’t think we can really predict what’s coming”. Pebble CEO Eric Migicovsky. There’s no denying that crowdfunding is a wonderful way of getting your start-up project off the ground. With the right marketing tools and strategy, you can successfully reach your intended audience and raise funds to make your dream project a reality. One of the attractions of crowdfunding is that unlike traditional investment techniques, you will retain all equity and ownership in your business and will receive useful, free advice from experts amongst the general public. So what are you waiting for? Hit the ground running with our comprehensive guide to successful crowdfunding and good luck!