A Roadmap to Success: Using Crowdfunding to Launch Your Product (Pt 2)March 2, 2020
9 Critical Steps to Power Your Next Direct Response Marketing CampaignFebruary 5, 2023
In Pt 2 of “A Roadmap to Success,” you learned how to successfully launch your brilliant idea using crowdfunding.
Now, you need strategies to keep your potential backers engaged during the crowdfunding process–ultimately helping you to reach your goals and raise the funds you need to see your dream become reality.
Here are four pitfalls to avoid:
Pitfall #8: Missing out on marketing opportunities with your crowdfunding platform.
Most crowdfunding platforms have specific features designed to help you effectively market your product to potential backers. Make sure to ask your crowdfunding platform about these types of opportunities before you launch your product.
Remember, they want you to succeed as much as you do!
Pitfall #9: Not investing enough in media spend.
You’ve often heard the saying, “You’ve got to spend money to make money.”
Nowhere is this more true than with marketing.
Let’s say you want to drive traffic to your crowdfunding landing page using Facebook ads. To raise $50,000 using this strategy, you should plan to spend ~$10,000 to adequately target prospective backers.
If you do plan on using Facebook advertising, we suggest creating 3-5 different ad groups with 3-5 ads each (Again, remember to invest in copy and graphics that will powerfully communicate the benefits of your product).
Your audience groups should be diversified so you can identify which groups are responding best. Do not lump everyone into one big ad group.
Furthermore, make sure all of your tracking is in place so you can identify which ad groups and ads are working.
Pitfall #10: Hiring a PR firm and expecting media coverage
PR can work, but usually as a second step, once your crowdfunding campaign has taken off.
Years ago, outlets were interested in the hot new idea and were willing to report on your launch. But the playing field is very crowded now–coupled with the fact that too many campaigns have failed to deliver the goods. As such, you have to weigh the benefit of paying a PR firm $3,000 to $10,000 against using that money on media spend. For instance, a $10/ CPM rate @ $5,000 will garner 500,000 ad impressions, which will give you the ammo you need to reach a specific audience online.
In the case of Lightning Packs, their video went viral due to Facebook advertising. Once the video took off, media outlets picked up the story!
Unless you have a fantastic launch budget, my recommendation is to launch with your own PR effort first.
Pitfall #11: Not planning for all costs associated with crowdfunding.
How much will it cost to ship product to backers? How much will it cost to communicate with backers after crowdfunding? Will you need to hire someone to handle administration, or to create additional content?
How much does the platform take? And don’t forget about payment processing fees. For instance, on Kickstarter, you will have to pay a 5% fee to Kickstarter and a payment processing fee somewhere between 3 – 5%. So make sure to factor in 8% in fees right off the top!
Think through all costs associated with your crowdfunding process, and you won’t get hit with unexpected expenses that aren’t covered by your budget.
Ultimately, crowdfunding can become a powerful and effective strategy for funding the launch of your “Big Idea.” But you’ve got to think carefully through every step of the process, take advantage of all opportunities to get greater reach, and stay engaged with investors.