- Why should I consider crowdfunding?
- How can I use crowdfunding to connect with my target audience better?
- How do I use crowdfunding to test out new products or ideas?
Say “crowdfunding” and people usually think of a lean startup seeking funds or an idealistic firebrand raising money for a cause.
It’s easy to imagine them creating a prototype of their idea, filming a cool promo video, posting them on a crowdfunding site, raising a ton of money, and BAM —finding huge success.
When you put aside these stereotypes, though, you can begin to see how crowdfunding can be a valuable tool for brands of all sizes.
What’s the right way to approach crowdfunding?
- It can be an effective marketing tool
- It can be a type of focus group
Crowdfunding isn’t just for companies that are just starting out. Brands can also use it to deepen customer engagement and test out innovative ideas. Let’s take a closer look at some of these benefits.
Done well, crowdfunding can help you create stronger connections with your target audience.
In social media marketing, people engage by clicking, liking, and sharing. With crowdfunding, they’re offering something much more valuable: money. And that’s a huge vote of confidence for your brand.
This type of monetary engagement can make your audience feel less like a customer and more like a stakeholder in the success of your product or project.
Imagine there’s a brand of healthy snacks called Benny’s Bran Bites. They not only believe in healthy eating but an overall healthy lifestyle.
Benny’s decides to expand beyond their Bran Bite business and launch a research and discovery lab that will explore new, innovative ideas or products that will help society live healthier.
They use a crowdfunding campaign to help spread the word about their lab as well as gain support for it. They start by asking college students to submit their ideas about what project the lab should tackle first.
Benny’s chooses the best 5 submissions and asks each of these finalists to create their own page on a crowdfunding website. The competitors are then given a set amount of time to gain support and raise funds for their ideas.
A winner is chosen based on the quality of their idea and how much funding they raised. They get an internship in Benny’s lab, working with experts to bring their idea to life. Benny’s also gives the other finalists $10,000 in funding.
This crowdfunding campaign not only gives Benny’s lab its starter project but helps anyone who’s pledged money to the winner or the finalists feel like they invested in the lab.
To do a crowdfunding campaign, you should have a general idea of your mission and donation goal. But more importantly, you need a good idea.
Whether it’s an innovative concept or an upcoming product, you can test the market and get feedback from the public.
Crowdfunding campaigns give you the luxury of a large-scale audience telling you if your idea or product is popular enough to launch. If you don’t get a resounding “heck yes, we’d buy this” from them, you may decide not to pursue the idea.
You can also find out what features people would like to see improved or removed entirely. You might even discover a great potential feature you hadn’t considered yet.
Let’s say Benny’s first lab project is a miniature food sensor that scans meals for nutritional content. They decide to test this product while it’s still in development.
Benny’s creates another crowdfunding campaign. This time, their goal is to get feedback and insights from a large community which will help them improve the food sensor’s design.
They offer a test version of their food sensor as a perk to anyone contributing to their campaign. The community shows a lot of interest in it, but Benny’s also receives comments asking why the sensor isn’t offered as a wearable device.
Based on this feedback, Benny’s redesigns the food sensor into an accessory that easily clips onto a watch, a bracelet, a belt, or a keychain.
Better yet, Benny’s crowdfunding campaign generates more than just valuable insights. They also get a lot of buzz and excitement around their food sensor – AKA, free PR.
Which is more important to you in the short-term?
- Increase your brand value
- Turn people into new customers quickly
- Get feedback on a new idea or venture
If you could hire one new employee right now, what would you have that person focus on?
- Community outreach
- Focus group testing
Which of these would your target audience respond to the most?
- A cause they can join
- A fun, new way to buy one of your products
- A chance to share their opinion
Which best summarizes your crowdfunding business goal?
- To rally
- To convert
- To innovate
Who would you rather partner with on your next marketing campaign?
- Community leader
- Advertising guy
- Research & development expert
References: Google Webmasters, Think With Google, Google Primer