A Crowdfunding Primer in Ten Easy StepsTue, November 17th, 2015
ArtistShare, one of the earliest examples of a crowdfunding platform, was established in 2000. Since then, the crowdfunding arena has grown to include numerous sites raising billions of dollars for causes, whether they be in support of a personal, corporate, or non-profit goal. Here’s a step-by-step guide to crowdfunding that can help you streamline the process and overcome obstacles to your campaign.
- Choose Your Funding Platform
Is your goal personal? Are you starting a cause that needs to be funded? Did you create a product that needs financial backing to bring it to market? Do your research on the best platform based on your campaign needs. The site crowdfunding.com ranks top sites based on global Internet traffic ranking and data analytics site alexa.com. After selecting your platform, research successful campaigns for tips you can also utilize.
- Create a Budget
Once you have decided on the best fit for your fundraising needs, you’ll need to set a fundraising goal. Be sure to factor in any crowdfunding site processing fees, product manufacturing and packaging costs, incentive costs, and order fulfillment fees. While order fulfillment is usually one of the final steps of any campaign, it’s critical to have at least a ballpark figure of shipping costs for your product(s). Depending on your product’s weight and dimensions, and what countries you will ultimately be shipping to, fulfillment and postage fees can add up, reducing the ultimate profitability of your campaign.
- Determine Your Funding Levels and Incentives
Depending on site fees and online payment processing fees, you may need to set a minimum donation amount. Offering incentives can help determine funding levels as well. For example, if you offer a koozie in exchange for donating up to $50 and a t-shirt for donating up to $100. Keep in mind that there is no way to guarantee how many donors you will have for a given funding level, so you may want to add a caveat such as the first 50 people to donate at a certain level will receive something. This allows you to properly budget for products and fulfillment services.
- Determine the End Date of Your Campaign
Is it time-sensitive, such as seeing how much you can raise in a 48-hour period, or dependent on reaching (or exceeding!) your ultimate funding goal? Having a clear end in site can focus your efforts on the final result and give your donors the impetus they need to commit their resources.
- Create Your Campaign
This seems straightforward, but be sure to cover the basics (where applicable):
- Who you are and who can donate to your campaign
- What is the cause or product their donation supports? What are the giving levels and/or incentives?
- Why should they help support your campaign?
- Where will the funds be directed?
- When will the campaign end and when will they receive an incentive (if earned)
- How can they support you? How can they share with their social media network to increase the reach of your campaign?
Be direct, not wordy, and use pictures to further explain the product, incentives, or funding need. Adding social media links like Facebook and Twitter makes it easy for donors to share your cause.
- Launch Your Campaign
Tweet, pin, post away! Ask your family, friends, neighbors, and co-workers to support you and help promote your cause. You never know who or what might help you past the tipping point into a successfully funded campaign. Depending on the nature of you campaign, you might draft a press release for the local media to garner additional attention and exposure.
- Market Your Campaign
Don’t just launch it and ignore it. Respond as quickly as you can to social media questions and posts, thank people for tweets, re-tweets, likes, and shares. Schedule time every day to promote the campaign and monitor donations and social media activity.
- Keep Your Donors in the Loop
Did you reach a milestone? Are you “this” close to reaching your goal? Did you exceed your goal? Share it on social media! Let your current donors know and ask them to share with their networks. The best referrals can come from existing donors. Keep up the campaign’s momentum and create excitement to attain your next goal(s).
- Ship Your Products
Depending on the size and scale of your campaign, outsourcing the actual order fulfillment can be a huge time saver (and headache preventer!). Whether you are shipping funding level incentives as described above, or a finished product that crowdfunding paid to manufacture, storing, packaging, and shipping thousands of orders from your living room is simply not practical. Ship everything to a fulfillment provider or Third Party Logistics (3PL) provider like Fulfillment.com, and they will pick, pack, and ship your orders. You can upload your orders and donor addresses via CSV or export them directly from your crowdfunding platform.
- Thank Your Donors
Leverage social media to thank your donors. Include a personalized letter or note with their incentive gift. However you choose to recognize donors, there is no such thing as being “too grateful.”