The digital age is slowly changing the way people do business. Aside from online shopping, digital marketing and other features, the internet and existing technologies have breathed life into different concepts that were previously impossible or impractical. One of the greatest concept to ever emerge along those lines? Crowdfunding.
In a sense, crowdfunding gives power to the people when it comes to product creation and development. Here, people pledge to (and help) fund concepts and products that they feel have potential. Business owners should probably think of it as an acid test in gauging interest for a prototype/variant of their products. Needless to say, it’s a unique concept that has unique implications.
We’re not saying that you should create your business model to revolve around crowdfunding. While probably not impossible, your virtual CFO or business coach will likely tell you that this unconventional source of funding isn’t something you can just haphazardly jump into. Still, this novel trend certainly has benefits that entrepreneurs can take advantage of. Follow these tips and learn how crowdfunding works - and how it could probably help your business.
Create compelling content.
Use engaging content to promote (and rally support for) your crowdfunding efforts. Focus on letting people know what’s in it for them. Be clear about your goals and create content that genuinely convinces people in supporting your crowdfunding campaign. Regardless of the medium — video, essay, illustrations, etc. — make sure that you are understood.
Brilliant design sets you apart.
Set your campaign apart from countless other campaigns by channeling your creativity. Create designs and gimmicks that help your campaign stand out. Your design complements your content and helps in persuading people to listen/read what you have to say.
Use social media.
To gain traction, engage your friends, family, and existing customers right off the bat. Acquiring a significant amount of initial pledges boosts your campaign’s attractiveness to investors and acts as a social proof and trust. Use social media to snowball your campaign’s progress.
Set grounded expectations and realistic promises.
When stating your funding goals, aim to state exactly what you need to get the ball rolling. In short, don’t think of crowdfunding as a means to make money out of nothing. Set a healthy amount that people can believe in and recompensate according to your initial promises.
Update your crowdfunders consistently.
Constantly let people know about the campaign’s progress through emails, social media posts, updates on the crowdfunding page, and other channels. People love it when they get to monitor the progress of the projects they backed and invested in.
Crowdfunding is simple. You conceptualize a product/business, convince people to fund it, push through once you get adequate funding, and compensate people who help fund your business with rewards (or equity in some cases) and/or products that you promised during your funding stage. What people don’t always notice, however, is that the entire process hinges on your marketing acumen in order to be successful.
Even of your business can’t benefit from crowdfunding, it’s a worthwhile exercise to test your marketing smarts and find out what areas you can improve on.
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