By Tatyana Kapkan, a guest contributor for CrowdClan and an Online Marketing Expert for FundRazr, Canada’s largest crowdfunding platform with deep social media integration. She is passionate about crowdfunding and coaching customers to help their fundraising campaigns succeed.
How to Run a Successful Crowdfunding Campaign
In the past 5 years crowdfunding has changed the way we think about starting our own businesses, ideas and projects. With a variety of platforms that allow us to reach a wider audience we don’t have to focus only on leveraging our personal assets to get off the ground. Moreover, we no longer need to worry whether our products will be in demand after released. Crowdfunding helps us validate our ideas before they are launched.
This particular topic and other steps to success were discussed on the Globe and Mail`s first microbusiness chat on September 19th, 2014. Daryl Hatton, the founder and CEO of FundRazr, Canada’s largest reward-based crowdfunding portal, Karl Pineault and Laurent Champagne of Free Spirit Hostel shared their best practices and answered questions on crowdfunding.
Let’s take a look at some of the highlights of the discussion.
One of the great benefits of crowdfunding is that it can help an entrepreneur determine if the market actually “wants” the product or service.” – explains Daryl Hatton, “By offering your product to the market and taking “pledges” to purchase it, you can get some incredibly valuable feedback on how much the market is interested and even feedback on what they’d like to see changed in the product.
Basically, you are only taking pledges for your project; no one has to buy the product right away. Essentially, you have enough time to communicate with your contributors and supporters, get their feedback about the product and rework the offer. Only once you have enough people interested, you can actually trigger the payments and start product development and shipments.
This is an incredibly cost effective way to get market feedback without having to build a sample run and see if you can sell it. – Daryl.
Tip: Use crowdfunding to test out your idea and act upon feedback you receive from potential consumers.
Did you hire someone to help create a video? What is the optimal video duration?
Karl Pineault shared his crowdfunding experience
Like in life, in business everything is related to your contacts. So, we looked around and found some friends that went to a film school and wanted to help us achieve our dream… So, we had two guys who did an amazing job filming our video with our ideas and concept. We knew as well that people love watching videos online but it has to be short and funny. That’s why we think that keeping your video within 2 minutes is the best but it also depends on the offer you want to give out to your donors.
Creating an effective crowdfunding video is a crucial step to tell your story and inform your potential customers of your product. You will be surprised that a video production does not have to be expensive to be effective. One of the key success factors in your video pitch is how you communicate with your audience. Daryl shared a great article that might convince you to start using videos.
Tip: Stick to 2 minutes long video to keep your supporters engaged.
How do you know how much money to raise?
If you are building a product and preselling it using your crowdfunding campaign, you need to ask for enough to finish the design and packaging, build the first production run and, very importantly, take into account the cost of shipping it to your customer.” – Daryl Hatton replies to the question – “While we’d all like to hit the ball out of the park, if you are not ready to handle a massive number of customers (and the risks that go with that – what if you have a product defect that doesn’t show up right away?) then you should cap your campaign and finish it before it gets out of hand…
Daryl also highlights that many entrepreneurs look at their crowdfunding campaigns as “easy money”, not considering the actual cost of providing the product to contributors.
Tip: Mind all the work it will take to fulfil your project and limits on your ability to deliver.
Speaking of perks how did you decide on them? Did you test out those ideas beforehand? On friends and family?
Laurent Champagne shares his experience with Free Spirit Hostel campaign
“The success about our campaign is that we stayed true to ourselves. The video really showed who we are, we knew that people would want to help us realize our dream so we went with options like names on the bus (to travel with us) and free nights at the hostel, to come and meet us. So we didn’t really adapt to the needs of friends and family, we created one in our own image”.
Perks can be used to strengthen almost any crowdfunding campaign, including entrepreneurial, personal and non-profit. Check out some of the great ideas here.
Tip: Take ownership over your campaign and make decisions around how to engage your contributors.
Should a campaign be placed on more than one platform at a time? Wouldn’t this result in more views and therefore, more contributions?
Karl Pineault thought about the idea to run his project on multiple platforms, but did not proceed with this idea, as “when you do a crowdfunding campaign, momentum is really important. So if during your first week you collected $2,000 but divided in 2-3 sites it doesn’t have the same impact on the mind of the donors…. the donors want you to reach your goal, so if they see the numbers going up quickly they will share your project more”.
Other participants agreed with Karl that it is important to choose a single platform that supports your unique requirements, goals and available resources.
Tip: When choosing a crowdfunding platform, look carefully at the pricing models, project requirements, and social media integration. Pick the right one!
A lot more topics were covered on the Globe and Mail’s chat, click here to view an archive of the conversation.
In the meantime, I’d love to hear your thoughts on the above topics and questions.
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