For every crowdfunding success story that gets featured on Forbes or The Huffington Post, there are several campaigns which struggle and fall by the wayside.
Kickstarter, the largest crowdfunding platform, has a mere 37% success rate (find out how to succeed on Kickstarter here).
Indiegogo and other platforms have an even lower success rate:
Of the campaigns that reach their funding targets, approximately 70% go in for additional rounds of funding from angel investors or venture capitalists before they step into the market.
So what separates the successes from the failures?
Most projects that are posted on Kickstarter or similar websites have genuinely interesting ideas. The reason most of these projects fail is that the creators underestimated the type and cost of promotion their products required.
When you are shooting for big leagues, a promotion budget is key–for example the World’s Best Travel Jacket campaign, spent over USD$200,000 on Facebook advertising alone, not to mention their PR efforts.
As an entrepreneur on a crowdfunding website, your marketing budget comes into play the day you post a campaign.
Here’s how you can make sure your crowdfunding campaign survives the competition.
1. Don’t put all of your eggs into the ‘free’ basket.
Admittedly, you can gain a lot of traction on the internet through free promotions.
Social media platforms, press releases and even blog posts can get your product noticed. But none of these methods are as effective as paid promotions.
Whether it’s paying for Facebook ads, hiring a professional crew for product videos and photo shoots or hiring a marketing team to help you with your promotions, you’ll need to spend some money to ensure results.
If you want to stand out among the thousands of active projects on Kickstarter or similar websites, make sure you’ve got a little money saved for marketing.
2. Make sure any third-party you involve is experienced with the specific kind of promotion your product needs.
There are several firms and agencies which specialize in running crowdfunding campaigns for entrepreneurs.
However, before you pick one of them to handle your product, make sure they have proven to be capable at launching campaigns similar to your own.
You’ll need someone who can find influencers, handle social media and advise you about the type and frequency of updates you need to post to your backers.
If your product is health-based, pick an agency that has several successful health campaigns under their belt.
You can see some of the top Crowdfunding agencies on Indiegogo’s Partner page, but for agencies that know what their doing, the fees can be steep.
Funded.today, for example, tends to charge 30% of final crowdfunding raise, on top of what you have to fork out for Facebook Advertising and other fees. But, when they take you on, you are sure to prosper.
3. Allocate your resources efficiently.
Work with your PR agency or marketing team to find the 20% of your actions that will get you 80% of your results.
Once you’ve identified the critical components of marketing your campaign, invest most of your marketing budget into optimizing them. You can spend money on the embellishments once you’ve got a revenue stream going.
4. Work on your copy diligently.
Your campaign page is your main landing page. It is what most of the people you want to turn into backers will see when they’re first introduced to your product.
To ensure maximum conversions, you will have to ensure that your copy is well-structured, hits all the right emotional notes and includes a strong call-to-action.
You could have the most viral marketing campaign, but if your landing copy isn’t strong enough, your conversions will suffer.
5. Start Strong
The first few days of your campaign are crucial.
Most crowdfunding platform guidelines indicate that 30% of your support should be secured from your own network before you open the floor to public contributions.
Your inner circle should be privy to a working prototype of your project before your campaign goes live, so that you have an immediate spurt of contributions. Once you’ve secured the support of your inner circle, your subsequent marketing should focus on converting the average visitor to a contributor.
Crowdfunding offers a fantastic opportunity for investors who are looking for funding.
But it isn’t all roses and unicorns. Marketing a crowdfunding campaign requires a distinct set of skills and strategies, and if you aren’t aware of them, you could be in for a rude awakening.
Use the steps above to stack the odds in your favor as you step into the crowdfunding arena.