By Missy Sheehan
Last month I wrote about crowdsourcing. Well this month, I’m covering crowdfunding, a tactic that both businesses and nonprofit organizations alike have used to raise the funds they need to create and launch new products or to support their causes.
Before I get to the main point, a bit of background: The term crowdfunding might be relatively new to the general lexicon, but the concept is certainly not. Musical composers, writers, and visual artists have been requesting monetary contributions from their patrons for centuries. Online crowdfunding platforms like Kickstarter have taken the tactic to a whole new level, though. Now anyone just about anywhere in the world can start a crowdfunding campaign with a few clicks of a mouse.
It’s not as simple as starting a Kickstarter campaign and watching the money roll in, however. The competition out there is tough. Since Kickstarter was launched as a rewards-based crowdfunding platform for creative projects in 2009, more than 9.5 million people have pledged nearly $2 billion to fund more than 90,000 projects including books, films, video games, works of art, and a wide range of creative and innovative products. Earlier this year, a Kickstarter campaign for a smartwatch by Pebble Time raised more than $20 million—well over the company’s goal of $500,000—during the campaign’s 31-day run. Most successfully funded projects, on the other hand, raise less than $10,000, according to Kickstarter’s website.
In truth, the majority of the campaigns started on Kickstarter ultimately fail for one reason or another. “Although Kickstarter and Indiegogo are two of the most popular crowdfunding platforms, success there isn't always guaranteed: For every project that meets its goal, there are dozens that just didn't pick up enough steam to get funded,” writes Nicole Fallon in an article for Business News Daily. Fallon goes on to offer a list of ten alternatives to the aforementioned platforms.
The crowdfunding campaigns that succeed, whether on Kickstarter or another platform, do so because they are compelling enough to garner sufficient support to fund the project and because the people running the campaign know how to spread the word far and wide.
That’s where social media comes in pretty handy as a marketing tool. “To be successful in rewards-based crowdfunding, effective use of social media is critical,” writes Kendall Almerico in an article for Entrepreneur. “Gaining financial support through social media is not as simple as posting a picture of your lunch on Facebook or retweeting the latest joke from Jimmy Kimmel. Successful crowdfunding through social media requires planning, dedication and determination.”
Almerico suggests updating social media profiles and trying to increase followers in the weeks leading up to the launch of a crowdfunding campaign for maximum effectiveness. He also recommends crowdfunders do two things in the days prior to launch: create a list of core supporters to help spread the word about the campaign and plan all social media posts to be used after the launch. “Having these two things out of the way before launch is essential because once the campaign is underway, a crowdfunder needs to spend time on the tasks that could not be done in advance, such as reaching out to media, interacting with donors and fulfilling rewards,” he writes.
Of course, that doesn’t mean your social media marketing job is done after the campaign launch. Be sure to stay engaged with your followers throughout the campaign and update them with the results when it’s over.