FAQ for Potential Campaigners - Part 2

Following on from Part 1 in our two-part series: FAQ for potential campaigners

6. How do I pick a platform?

Project creators are often inclined to campaign on one of the two biggest platforms in order to reach a larger audience. On the other hand, campaigners also face fiercer competition on these popular platforms.

Again, it depends on the audience that the campaigner is targeting and the type of service each platform provides. Smaller platforms with specific geographic services could work well with projects that are targeting a local audience.

Some platforms are more industry-specific and offer backers opportunities to invest in industries that normally have a high threshold, such as real estate.Philantropic platforms will build communities with charitable goals.

7. How do I decide how much to raise?

The project creator needs to calculate the cost of jumpstarting the brand or project and benchmark the funding amount from there.

Remember to include fees for the crowdfunding platform in your cost calculation, which is typically around 5%, and credit card transaction fees at around 3%.

Statistics have shown that backers typically spend $10-75 on a campaign and projects with less than US$10,000 goals have higher success rates.

Do not aim for the campaign to fund your entire business. If your project is expensive, break down the cost in phases and aim to raise funds to cover one of the phases.

8. What do I need to prepare before the campaign?

There are heaps of items to prepare before launching a crowdfunding campaign. For higher chances of success, here is a basic checklist:

• Design and prototype your product or create a preview of your project / service.
• Make a video. A 1-3 minute video is one of the more compelling ways to tell your story
• Create a compelling story and use attractive images. The audience scrolling through the campaign page need to be captured by an enticing combination of photos and text.
• Decide what the Rewards would be. Backers are happy to support projects, but they also look to get something in return.
• Create a splash page for your website to start building your SEO. The splash page should have your video, a newsletter sign-up and link to your campaign once it is live.
• Set your funding goal.  Have a clear vision of how much you need and how you communicate that cost to backers.
• Set the campaign length. Most campaigns run between 30-60 days, just long enough to spiral out to a broader audience.
• Do the PR / Marketing seeding ahead of time.  Reach out to the press and social media to let the audience know your awesome campaign is coming.
• Send personal emails to your network to let them know about the campaign. If friends and family like the campaign, they will share it with their network.

Platforms such as next Next Chapter provide comprehensive campaign guidelines to all project creators, optimizing the road to success.

9. What happens during a campaign?

Now you have hit the LAUNCH button and your campaign is live! First and foremost, take lots of deep breaths and don’t crack under the countdown button. Counting down the days could be stressful. You need to be mentally prepared for lull days in the campaign.

Statistics have shown 42% of funds are raised during the first and last 3 days, and 30% of the funds are contributed by personal network. However, don’t sit back and wait to receive the funds, you must proactively reach out to your network.

Reach out to your network again

As mentioned previously, send personal emails to everyone you know and inform them about the campaign. Contact them again during the campaign as a friendly reminder but don’t overwhelm them with too many emails.

Let them know the progress

Update your campaign often. For those who have already backed your campaign, they are interested in knowing how it’s progressing. Newcomers might see interesting developments in the campaign and decide to pledge.

Don’t be afraid to shift content around

Continuously tweak the content during the campaign and test the audience’s reaction to different content and marketing angle. Most of the audience is captured by the story. It is crucial project creators find the most compelling way to illustrate the story.However, the more you can do to test this before the campaign launch, the better.

Reach out to media and influencers

Don’t forget to reach out to the media – both online and offline—to get your project covered. If possible, line up a few KOLs (key opinion leaders) to blast their social media followers throughout the campaign.

10. SUCCESS! Now what?

There are three crucial things to keep in mind once the campaign is over.  Crowdfunding is just one of the first steps to launching your business or project.

Be grateful to your backers

As your project would not be possible without the funding of your backers, remember to keep in touch with them. They are most likely your earliest community of supporters or customers. Surprise and delight them with perks or personalized notes or even commemorative gifts.

Beware of cash flow

Now that you are sitting on a HUGE pile of cash, there are sufficient funds to start your project or manufacturing process and beyond.  How we wish that was true. Startups often underestimate costs and need to think ahead on how to keep-up a steady flow of revenue, including keeping sales channels open for those who have missed the campaign and are still interested in funding the project. Another way is to make sure your web site is up and running by the time the campaign closes to ensure the audience can purchase directly from there.

Get your supply chain in order

If your project requires manufacturing and delivering physical items to backers, it’s necessary to monitor the whole supply chain closely, from the manufacturing process to quality control to shipping and fulfillment.

Many manufacturing and logistics companies might not be as agile as project creators anticipate. Before committing to a manufacturer, make sure they can deliver anything from the lowest minimum to a large quantity (in case your campaign has gone viral and sales are off the charts) in your expected timeframe. Estimate the shipping price and any other hidden costs with courier and shipping companies. In some cases, some projects charge shipping fees AFTER the campaign when the costs are finalized.

11. What are the risks of crowdfunding?

The most immediate risk would be not meeting your funding goals. Often campaigners underestimate the amount of work that goes into the preparation of the campaign. Like most things in life, there are no short cuts. Preparation is key to the success of any crowdfunding campaign.

Every campaign needs a strategic plan to help project owners get ready, including tactics for building an audience before launch, tools for evaluating funding goal, a sound marketing and PR plan, researching the right crowdfunding platform, and evaluate timing of the launch.

Many projects that successfully raised funds face other issues, such as not delivering the product on schedule. Project owners may underestimate the amount of effort it takes to manage the supply chain, and manufacturing capabilities fall short of expectations. It’s crucial that project owners have an idea of the manufacturing partner’s minimum and maximum capability before launching the campaign.

Crowdfunding is just the first step to jumpstarting a business. Without nurturing, the business will still be at huge risk. Managing backers after the campaign has ended is a key step in building a loyal customer and advocate base. Always remember to check in with backers after they have received the product to get feedback or delight them with new surprises.

If you are thinking of starting a crowdfunding campaign to realize your dream, we can help! Please email Nicole Denholder, Founder & CEO of Next Chapter, for more information: [email protected]

Prepared by Nicole Denholder and Stephanie Poon, Founder of Zarie.co