Crowdsource funding – otherwise known as crowdfunding – refers to the process of raising funds by seeking contributions from a wide range of people.
This activity is usually centred around a crowdfunding platform, such as Kickstarter or IndieGoGo, where the person or organisation seeking funds creates a page to pitch their project to the public and receive contributions.
There are three types of crowdfunding:
In 2015, around $34.4bn was raised through crowdfunding worldwide for projects of every scale. Notable examples include the Pebble Time smartwatch, which raised over $20m on Kickstarter; and Exploding Kittens, a card game “for people who are into kittens and explosions” that raised over $8m. Big corporations are using crowdfunding too – particularly to test new products in different markets.
In our recent Digital Marketing Podcast episode on crowdfunding, we spoke to a leading crowdfunding expert, Heather Delaney of Dynamo Communications, to find out her best advice for businesses looking to crowdfund a project.
Download Episode 155
Here are her top tips:
“A crowdfunding page is a large messaging document for your campaign. It should be crafted to target different pledge levels.”
“The video itself is one of the most important parts. Regarding length, the sweet-spot is around a minute and a half/two minutes.”
“Preparation in advance is essential. Take production and manufacturing timelines into account, plus the cost of shipping.
A lot of platforms allow you to limit shipping geographically, which is an option you might pursue if you need to keep costs down.
You should be preparing your PR and marketing around 6-8 weeks in advance – and ahead of that 6-8 weeks, you should start putting out ad spend and email marketing to test your audience. If you can find out where your potential customers are before you launch, you can push budget over to them in advance.”
“It’s best to under-promise and over-deliver. Be open, honest and keep people updated.”
“It’s important to make sure your website has the capability for selling/pre-orders before your campaign finishes. It easy to overlook this in a rush to get the word out on your crowdfunding platform, but you have to remember that when the crowdfunding campaign is over, you need a central hub to communicate with your customer base. Make sure you are prepared and planned out for this well in advance of your Crowdfunding campaigns going live. The switchover needs to be planned for if you are going to be effective beyond the initial funding round.”
Listen to our full interview with Heather at The Digital Marketing Podcast