The Five Best Practices for Successful Crowdfunding
Here at the Internet Business School, we’re constantly keeping an eye out for the most effective ways to get small businesses growing. That’s why we produce our range of great internet marketing courses, the latest of which is a guide to an increasingly popular way of starting up a business - Crowdfunding. Crowdfunding, raising money for a project from online backers, is a way of funding built on communication and trust between business and customers. While crowdfunding can lead to great success, online backers are wary of scams and false promises. Legitimate businesses can fail to crowdfund due to gaining a bad reputation, often due to lack of trust-building communication. Here are the five best practices to making sure your crowdfunding projects are successful.
Do Your Research
Your crowdfunding campaign won’t get anywhere if you don’t understand your target audience and community you see your idea or product fitting into. Before you even start your crowdfunding campaign, you need to stop and visualise where your product or service will fit and what its audience will be. Imagine your intended audience, their interests, look at the sort of campaigns they already follow and what social media they use, then use all this information to advertise your own ideas.
Communication is Key.
Don’t assume that because you put your product out there that people are naturally going to find it. Even before you’ve completed your product you need to work out the demand for it and start communicating with your audience. Communication with your audience must be consistent and it’s important to remain on top of it throughout your campaign. Every channel possible should be used, be it email, social media or a website. Online crowdfunding platforms often have news feeds and comment sections, these too should be used to approach your audience and answer any queries they may have. Backers will only feel confidence in you if you maintain a good relationship with them and that requires quick, easy and up to date communication.
Be Transparent with your Business
Throughout your campaign and your crowdfunding platform, all the main parts of your business and product should be very clearly explained. This builds up trust and if you omit any of the details this will raise questions about whether they wish to invest in your product. The quality of your website and advertising also factors into whether people trust you. They don’t have to be completely perfect, but customers trust companies that look like they have spent time and effort on their advertising materials. If you’re hesitant to show your website or advertisement to someone, this is a good indication that you need to put more time into it.
Market from All Angles.
It goes without saying that you need all the attention you can get to raise funds. This means you’ll need to take a mixed approach to marketing with both digital and physical promotion. In addition to websites, videos and other internet based approaches, you should seek more traditional ways of advertising. Show up and gather attention at conventions, interest-group get-together and even at competitors’ events to approach your audience directly. You can also collaborate with other people and their campaigns. Such collaborations could involve including another company’s information or pictures in a campaign update whilst they do the same. Make sure these other companies are credible otherwise your business will look untrustworthy for partnering with them.
Maintain Your Reputation.
Even after you’ve launched a product or service off the back of crowdfunding, it’s important to keep up public relations. Having a good start is key but so is continuing the successes of your business. Keep up with your communication with a steady flow of updates so backers continue to trust you to deliver what you’ve promised. As soon as you’ve made progress with a product or service, be it sourcing components, making a partnership or having a trial run, update your backers on this fact. This transparency maintains your reputation and gives customers confidence in your business.