“If you build it, they will come,” is a fantastic slogan for inspiring a baseball game in Field of Dreams, but not all the bright lights of Hollywood are able to fix some of the submission for crowdfunding. In haste to create a revenue source for their dreams, hundreds of people everyday eagerly post projects on sites like Kickstarter,GoFundMe, Crowfunder, and IndieGoGo.
In truth, most projects are a little like Tom Cruise screaming “show me the money” in Jerry Maguire.
Apologies for the digression into movie history!
First – Lets Talk About Crowdfunding Demographics
Although GoFundMe boasts "over $75 million dollars raised since 2010," the reality is that most projects that fail to receive funding lack the six essential social mediaelements that create a strong approach to answering the most basic marketing questions.
Indicators show in a study by American Dream Composite Index the demographic for crowdfunding as:
- Age. Individuals ages 24-35 are much more likely to participate in crowdfunding campaigns; those over 45 are significantly less likely to back campaigns.
- Gender. Men are much more likely to take a risk on an unknown startup.
- Income. Those earning over $100,000 per year are the most likely to invest in startups through crowdfunding.
See: http://bit.ly/crowdfunding_demo for more in-depth information.
Next – Habitual Behaviors of Crowdfunding Investors
In truth, there are three levels of crowdfunding investors:
- Level 1 – Initial Investors: These investors are the people who buy in early because they love the concept or idea. These people usually also enjoy the reward connected with the contribution and the ability to say they helped fund the idea. These are the early adaptors of most markets and technologies.
- Marketing Motivation: Making your crowdfunding campaign sharable and rewarding is very important to this type of investor as well as creating a steady update stream for monitoring growth such as pictures, video, and social media.
- Level 2 – Get On Board Investors: These investors are interested in watching the project progress to see if it will be viable. For them, the burden of proof – even if it is slight – is overwhelming. These people need to see some justification for investment through either press coverage or other investor interest.
- Marketing Motivation: The stream of social media with newsletters combined by way of press releases, images, and video help move an investor to get on board while they can because these options open the door to sharing and seeing others participate in the growth process.
- Level 3 – Home Stretch Investors: There are two types of home stretch investors. First, the Finalists are people that have just found out about the project through a friend / family member or a “Get On Board Investor” with a stubborn streak who decided not to be left out at the last minute. Second, the Secret Santa’s are the people who dig deep to invest a little more to the project in order to push it over the top.
- Marketing Motivation: Investors are attracted by being a part of the winning team. These people are usually not new to the project or crowd sourcing in general. The marketing needs to accept these advanced investors with special rewards and recognitions with contests, informational presentations, and product placements in social media. For example, ask for their opinion on color selection, optional features, and functionality that allow them to claim some ownership in the production or outcome.
Finally – Let’s Get Social!
When adding up the money, the dollar signs are indeed staggering as words like crowdfunding and crowdsourcing became the new buzz words for every new invention or service. These six essential social media marketing strategies touch each type of crowd funding investor in the wheel-house of their marketing motivation:
- Social Media Share: Social media avenues help build an input channel for potential investors and build an audience accustomed to sharing viral information. At the same time, certain social medias like Facebook, Twitter, Google+, and blogging creates searchable content for Google.
- You Too YouTube: Youtube is the number two search engine in the world. Is that enough reason to have video as a part of a crowdfunding campaign? Yes! Without doubt. More importantly is the video evidence of each successful step of the process. From the initial demonstration of the product or service to latter stages of development, video has the ability to gain buy-in instantly because investors can see that the product actually works and how it works.
- Picture Perfect: Outside of the initial design sketches or ideas, most projects have the basic pictures of drawings or images taken with a camera. Seriously, it is time to shine up those images because a picture is truly worth a thousand words. When a potential investor can see someone using the product to solve a problem, there is the advantage of being able to become a part of the situation and the solution.
- Good Newsletters: Without a good newsletter, a crowdfunding campaign fails on several levels. First, this is the best way to stay in connection with funders to update progress. Second, newsletters are sharable from one investor to others with a simple click of a forward button. Third, newsletter gives potential investors the opportunity to answer MAYBE if they are not ready for YES and would decide NO. Lastly, a newsletter engages investors and keeps the project in front of them so they can fund again if needed or necessary.
- Press the Press: One huge often overlooked social media strategy is approaching the press through magazines, newspapers, and industry related bloggers. Armed with a strong press release that explains the best of the project, coverage from the media – online and offline – can give great exposure, fantastic links, and high level creditability to any project. Most investors will trust a review from the New York Time or a respected industry blogger.
- Web Ready: Many projects rely on crowdfunding websites for information and interaction with potential investors; however, a website devoted just to the project and marketing materials can be a useful tool in encouraging fast communication with press and reliability for investors. With a minimal space and restrictions of a crowdsourcing project guideline, a website gives project owners room to spread out to share information instantly.
Realistically, crowdfunding is just like selling a service or product WITHOUT the service or product on-hand ready to ship. In many cases, the marketing must work harder to convenience potential investors of the value proposition.
Last Stop – The Crowdfunding Mentality
Even as Kickstarter touts that there are over $606 dollars pledged every minute with over 50,000 people funding more than 10 projects, there is only a 43% success rate with some categories significantly skewing the curve upward.
If you want to see the stats for Kickstarter – http://bit.ly/kickstarter_data.
Consider this – As the link and slideshow shows, if your product or service is in the realm of frequently successful categories for crowdfunding, it does not mean that the road is easier. In fact, it probably means that your social media needs to be more on track and targeted to reach the audience segmentation.
Without proper social media marketing, potential project owners should consider buying a lottery ticket instead of working through the process of creating and executing a crowdfunded marketing campaign.
CrowdFunding expertise, wisdom and resources for startups and entrepreneurs