Top mistakes to avoid in crowdfunding campaigns

Top mistakes to avoid in crowdfunding campaigns
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While crowdfunding can be a huge success in helping your business raise funds, most small businesses will struggle with their campaigns. Why? Because they make one or more of the following mistakes. Crowdfunding isn’t like taking out a bank loan. You must really understand your marketing, be tech savvy and know build a buzz around your campaign, otherwise it will fall flat. Carefully read the top mistakes to avoid in crowdfunding campaigns, so you can effectively leverage this valuable funding source.

1. You Don’t Realize, No One Cares About Your Campaign

Crowdfunding is an exciting new way to generate funds to start or grow a business. When Kickstarter and Indiegogo came out a few years ago, people were jumping up and down about having an opportunity to invest in something that was a cause they could believe in or a product they really wanted. Well, now there are thousands of crowdfunding websites and campaigns going on at any given moment, and it’s gotten a lot harder to be heard above the noise.

You may be excited to about your campaign, but get real: no one cares (But you.) Use your mission and giveaway offers to make them get engaged in your campaign.

2. You Set An Unrealistic Goal

Some crowdfunding sites won’t give you a dime if you don’t hit your goal? So if you say you want $500,000 and only raise $7,500 (nothing to sneeze at), you won’t get any of it (the money will go back to your donors). Be smart and set a realistic budget, recognizing that the average crowdfunding campaign raises only $10,000. If you raise more money that’s great, but don’t risk not getting any of the fund. Read the details on the crowdfunding platform you choose so you understand how their payout works.

3. You Don’t Market The Campaign

If you launch it there’s no guarantee people will come. How will get people to care about your campaign if they don’t even know about it? Crowdfunding marketing is its own thing entirely, and there are even marketing specialists that focus on this as a niche. Just like you would market your products or services, you must also market the campaign. You have to create awareness of it and then continually keep people’s interest so they will not only invest in it but also tell their friends about it.

4. Your Offers Are Too Weak

Crowdfunding campaigns usually offer incentives in exchange for their investment. That might be a t-shirt for a $10 donation, or an invitation to an exclusive event for a $1,000 donation. The problem is, many entrepreneurs don’t put enough effort and thought in these offers. Some people will contribute to your campaign because they want to support what you’re doing. But others will only get involved if the “giveaways” are enticing. If you’re launching a new, innovative product, why not give donors your product before anyone else? Also consider experiences over cheap tschotskes, since people value them more.

5. You Lose Steam Mid-Campaign

Your campaign might start off with a bang, but the longer it goes on, the more challenging you find it to keep up that momentum. By mid-campaign, you’re swamped and don’t really have time to invest in nurturing your audience. That’s an issue because people want to continually be updated on what’s happening with the campaign. Send a short communication to donors to update them on what’s happening (“We’re 80% to our goal. Tell your friends!”). If there are exciting things happening in your company as a result of the campaign, such as you making the 10 o’clock news, share that.

6. You Didn’t Lay The Groundwork

You need to start planning at least 6 months before launching your crowdfunding marketing campaign. You need a marketing strategy in place. Then you need to build an email list. And you need to know which channels you’ll use to promote it (hint: all of them; social media, email, blog, FB ads, et cetera). You can engage your audience by offering teasers of the campaign. If your audience pays close attention to you on social media, you can let them know a new product is in the works, and they can soon get in line for it once your campaign launches..

7. You Don’t Deliver What You Promised

You need to keep your brand promise. Be sure to get your incentives out on time! Your investors want to be assured that if you say you’re going to use the funds in the way you promised. If you raised money to launch a new product by the end of the year, then you need to do that. Nothing destroys trust more than you taking people’s money and then they get nothing.

Even if you are doing something with it, communicate after the campaign. You have the email addresses of your investors, so keep in touch especially if you do hit snags or delays, communicate them early.

Crowdfunding is a real option for small businesses as an alternative funding source, but only if you put a strategy in place first. Make sure to build an email list of at least 2000 contacts, hone your marketing message and engage on social media to communicate it to your target audience.

The blog post was originally published as 7 Biggest Mistakes People Make in Crowdfunding Campaigns on www.succeedasyourownboss.com.

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