How To Use Crowdfunding as your Marketing Strategy
Crowdfunding is an excellent way for entrepreneurs, creatives and innovators to raise money for their big idea. But it has a ton of other benefits that can impact the growth of your business, saving you time and money in the long term.
In this article I’m going to tell you how crowdfunding can really impact your business in ways you might not have even considered. You’ll also learn how building a community around your idea is an important aspect of your crowdfunding campaign.
These days, we hear about more and more big brands and celebrities choosing crowdfunding as a way of launching new products. Bose crowdfunded a new type of earbuds, Heineken partnered with Indiegogo to fund an exciting program for Project Creators and Hasbro went as far as launching their own platform to crowdfund some awesome toys.
These big brands don’t resort to crowdfunding because of lack of money. They simply realise that the power of crowdfunding does not lie in the money but in the crowd itself.
So, what are the benefits that a crowdfunding campaign will bring you?
1. Access to seed money
Ideas are great to have but you need funding to get them off the ground. The traditional routes of seeking financial support usually involve banks, accredited investors or venture capitalists. Crowdfunding opens up the possibility of getting funding quickly from an engaged community.
2. Live market research which minimises your risks
Launching a crowdfunding campaign is a great way to assess the state of your market before going all in with your product and company. You can determine if there’s a need for your product or idea before overspending on it, something you can’t research through the traditional funding routes. Your reward tiers will also help in researching how much people are willing to pay for your product or idea.
3. Proof of concept & market validation
Your crowdfunding campaign can be exactly what you need to show the world that your product has a market out there and people see the value in what you’re selling. You can not only use this in future marketing campaigns but when the time comes to scale your business, it will be a great way to back your growth claims with data.
4. Live feedback
Throughout your campaign, you’ll get many chances to see what your backers are thinking about your product and your campaign in general. You’ll receive live feedback on your design, on product features – what people like and what they don’t, what they’d take out and what they’d like more of.
These insights will help you think about your strategies, refine your solutions and have a bigger impact on the market.
5. Marketing & PR exposure
Your crowdfunding campaign will be a great way to introduce your idea to the world. By incorporating social media and press coverage into your campaign, you can reach people that you otherwise wouldn’t have and even expand your market on a global level.
6. Early adopters and loyal fans
By launching a product through crowdfunding, you are essentially inviting people to be a part of your business journey. This is a great opportunity to turn early adopters into loyal fans and a true community by inspiring them with your story and engaging with them throughout the campaign. The people who believe in you, in your product, in your story will be they key component in your campaign’s success.
7. An opportunity to crowdsource brainstorming
One of the biggest challenges you will face as an entrepreneur or small business is covering all the questions about your business. With crowdfunding, your backers will be asking the tough questions for you. So, don’t be alarmed if they’re poking holes in your business or marketing plan; take this as a great opportunity to repair these holes in your business with the help of your community. It can help you solve previously unknown problems, and it can also inspire some new products and ideas for your business.
You are effectively doing pre-sales with your crowdfunding campaign – launching your idea to the world before you even have the products themselves. In addition to helping you increase awareness about the product, give you proof of validation and live feedback, crowdfunding will also help you keep costs at a minimum by giving you an insight into the size of your market.
Essentially, whether you are looking to fund your new venture or get some feedback from potential customers, crowdfunding can help you get a great insight into your market that otherwise would take you months to gauge. Tapping into the power of crowdfunding will bring you many benefits and there is no better time than now to take advantage of the associated benefits!