6 Tips for a Successful Rewards-Based Crowdfunding Campaign
15 April 2015 ,Wednesday
Can one business take their product from an idea to the shelves of stores around the world simply with the power of the internet? Ask Goldieblox, an engineering toy designed specifically for girls. In 2012, the makers used crowdfunding to bring their dream to reality. Now, their product can be found on the shelves of Toys R Us.
Then there’s Glif, a smartphone holder that can be used as a stand or a tripod – especially handy for taking a selfie or using your phone to make a video. The original budget was $10,000 and by the end of their crowdfunding campaign, the makers raised $137,000.
What do these products have in common? Entrepreneurs with an idea and a goal used crowdfunding campaigns to raise the funds, instead of turning to angel investors and other means of funding their business idea. In exchange for donations from backers, the company gave rewards at every level. No matter how much money someone gave, they received something in return.
Rewards-based campaigns can be wildly successful and help you achieve your goals, if you keep a few things in mind. Take a look at these six tips to set up a successful campaign for your small business idea or product.
1. Have a marketing plan before you begin. “Build it and they will come” doesn’t work here. You’ll need a plan in place to draw attention to your campaign.
2. Consider six to eight tiers for levels and rewards. The most common contribution is $25. Have a tier or two below and then a few above to give people choices.
3. Keep your premium rewards limited. You can set a maximum amount of donors for each tier. To give a high tier, like $5000, a sense of exclusivity, limit the amount of people who can give at that level.
4. Create a budget for your rewards items. You already know you need a budget for the campaign. You also need one for the rewards. Consider the cost of each item to make and distribute and compare that to the amount you’re asking for. You shouldn’t lose money on a tier.
5. Create compelling rewards. Depending on the price tiers you create, rewards can be almost anything. Try these ideas out:
- Thank you/credit – on social media, in video, somewhere within the product/service website, etc.
- Branded merchandise – a hat, t-shirt, or something with your brand’s name or logo on it
- Product/early access/subscription – whatever it is you’re using your campaign to create, give it away to backers at a specific tier. Think of it as a pre-order.
- Parties and events – these are good for the premium tiers
6. Let people know what’s in it for them. What are they getting for their money? This is more than the immediate rewards for backing your campaign. Also, talk about your campaign and what need your product or service will fill.
Setting up a rewards-based crowdfunding campaign is achievable and a valid option for small business owners to create a new product or set up a much-needed service. Think about your goals and plan for the campaign well before you launch, and keep in touch with your backers throughout the project and beyond. This, combined with the tips above, will help you have a successful campaign and achieve your business goals.
Want a crowdfunding campaign for your next business venture? Work with the experts who can walk you through the process of business development, help you set-up your campaign, and know how to market you, your campaign, and your business. We want to work with you and make your business dreams come true. Contact us today to learn more!