As the SmallBizLady, I get a few emails a week from eager business owners who have launched a crowdfunding campaign with the hopes that I would write a story about them to boost their campaign. Well, I’m not going to do that. Here’s why: 9 out of 10 of them that I look at have very little chance of being successful. So as a public service, I have written this blog post so the next time, you’ll launch your crowdfunding campaign fully informed. Here are the 7 biggest mistakes people make in crowdfunding campaigns.
- You Think That Anyone (Besides You) Cares About the Campaign
When crowdfunding first came out a few years ago, people were excited to browse the campaigns on a site like Kickstarter and invest in something that struck their fancy. Well, now we have thousands of crowdfunding websites and campaigns going on at any given moment, and it’s gotten challenging to be heard above the din.
You may be excited to announce your campaign, but get real: no one else really cares. Use your mission and giveaways to make them care.
- You Believe The Campaign Will Market Itself
How do you get people to care about your campaign if they don’t even know about it? Crowdfunding marketing is its own thing entirely, and there are even marketing specialists that focus on this as a niche. Just like you would market your products or services, you must also market the campaign. You have to create awareness of it and then continually keep people’s interest, so they will not only invest in it but also tell their friends about it.
- Your Giveaways are Lame
Crowdfunding campaigns usually offer investors an incentive in exchange for their investment. That might be a t-shirt with your logo for a $5 donation, or an invitation to an exclusive event for a $1,000 donation. The problem is, many entrepreneurs don’t put enough thought into those offers. Some people will contribute to your campaign, because they like and want to support what you’re doing. But others will only get involved if the “goodies” are enticing. If you’re launching a new, innovative product, why not give donors at a certain level access to your product before anyone else? Also consider experiences over cheap tschotskes, since people value them more.
- You Lose Steam Mid-Campaign
Your campaign might start off with a bang, but the longer it goes on, the more challenging you find it to keep up that momentum. By mid-campaign, you’re swamped and don’t really have time to invest in nurturing your audience. That’s an issue because people want to continually be updated on what’s happening with the campaign. Send a short communication to donors to update them on what’s happening (“We’re 80% to our goal. Tell your friends!”). If there are exciting things happening in your company as a result of the campaign, such as you making the 10 o’clock news, share that.
- You Waited Until the Campaign Started to Lay the Groundwork
Your crowdfunding marketing really should begin 3-6 months before you launch the campaign. You need a strategy in place, your need to build an email list and you need to know which channels you’ll use to promote it (hint: all of them; social media, email, blog, ads, et cetera).
You can prime your audience by offering teasers of the campaign. If your audience pays close attention to you on social media, you can let them know a new product is in the works, and they can soon get in line for it once your campaign launches.
- You Set Your Goal Too High
Did you realize that some crowdfunding sites won’t give you a dime if you don’t hit the goal you set? So if you say you want $1 million and only raise $5,000 (nothing to sneeze at), you won’t get any of it (the money will go back to your donors). Be smart and set a realistic budget, recognizing that the average crowdfunding campaign raises only $10,000. You can always go beyond it. And read the fine print with the crowdfunding site you choose so you understand how their disbursement works.
- You Can’t Deliver What You Promised
Above all, your investors want to be assured that if you say you’re going to use the funds you raise to launch a new product by the end of the year, that you do that. Nothing destroys confidence and trust more than you taking people’s money and then doing nothing with it.
Even if you are doing something with it, communicate after the campaign. You have the email addresses of your investors, so keep them apprised of what’s going on. If you do hit snags or delays, let them know.
Be sure to get your incentives out on time! You can limit how many you offer of each one, so don’t oversell if you can’t deliver. If you can only feasibly give away 100 of your new product once it’s released, don’t open up 1,000 slots for that incentive level.
Crowdfunding works, but only if you put a strategy in place first, are on top of your marketing message, and are willing to communicate it to your target audience.