By Blair Williams, founder of the WordPress membership plugin MemberPress and affiliate program plugin Easy Affiliate.
Thanks to technology, it’s possible for anyone in the world today to raise money by appealing to the generosity of the world at large. People can raise money from multiple individual sources and fund their dream wedding or get life-saving care.
Crowdfunding is also an alternative way for entrepreneurs to get funding for their businesses. When an entrepreneur’s idea doesn’t win backing from investors or if they just don’t want to give up control, crowdfunding makes for a good way to raise money.
Whether it’s for donations or to kickstart a new business idea, crowdfunding that works has a lot of lessons for entrepreneurs and marketers.
Here are some essential lessons I’ve picked up from observing crowdfunding activities and how we can apply this to marketing our own businesses and products.
1. Be honest.
When you’re asking for people’s money, it’s critical that you’re being completely honest. Whether you’re asking for donations for a cause or launching a brand new product, your audience will not be forgiving of any untruths.
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While this shouldn’t be particularly mentioned, it’s worthwhile to know that people who have fabricated stories to get crowdfunding have dealt with spectacular backlash.
As a business owner, you need to make promises that you know you can deliver on. Your customers can easily leave a review of their poor experiences for the world to see. And other savvy buyers who do their research will use such reviews to finalize whether they’ll buy from you or not. It should be obvious, but make sure that your marketing content always reflects the truth.
2. Tell a story.
One aspect of crowdfunding that stands out is that great campaigns engage people with a powerful story.
Whether it’s to fulfill a wish to travel or launch a startup that funds women’s education in a rural community, telling a human story is compelling. This is especially useful for small businesses that can’t leverage expensive marketing campaigns.
If you want your business to get more engagement, make use of stories. Think about important experiences in your life that led to you becoming an entrepreneur. How would you like to impact the world? Bringing these stories to your marketing will find customers who care and, more importantly, who’ll stay loyal and help you market your business through referrals and ambassadorship.
3. Leverage the power of social media.
This is an obvious step that’s still worth mentioning: Use social media. Good crowdfunding campaigns really take off when they gain attention from shares made by the supporters of the campaign.
To use social media effectively for your own marketing campaigns, reach out to bloggers and other influencers in the sphere of your industry.
Create content and images that are consistent across platforms and share them regularly. Visual content often has the best impact on social media. So focus on videos and images that feature yourself or a representative for your business. Adding a face to your marketing immediately engages people and helps build trust faster.
4. Leverage reciprocity.
Crowdfunding isn’t just about asking other people for money and support. There’s reciprocity taking place in different ways.
Some influencers create campaigns where they give out autographed items or even meet the highest contributors personally. Many small and innovative businesses offer different tiers of contributors something in exchange for their contributions.
Smaller contributions get a discount on the product they’re funding. While top-tier contributors get early access to the product itself.
For your own business, look for ways to leverage reciprocity. Don’t just ask people to give you their business. Offer them something in the beginning to build a relationship. You can give your audience free ebooks, free product demos, access to your product with limited features and anything else that makes sense.
When your audience receives value from your business, they’ll be more likely to respond to your marketing with an open mind later.
5. Involve the audience.
Another reason why crowdfunding is so powerful is that it makes the audience feel empowered in some way. When people contribute, they do so knowing that they’re making a difference.
You can create a similar feeling in your interactions with your customers. For starters, ask people for their feedback on your products and services. Invite users to participate in surveys and even talk to some customers one-on-one.
Getting feedback and understanding what your customers want will help you fine-tune your business’s offerings and workflows. And your customers will feel like their opinions matter.
Another way to create the feeling that your customers are part of something larger is to send reports on the state of affairs around your brand or product.
For one of my brands, we send yearly reviews where we share with our customers about the growth we’ve experienced as a business. We use infographics to show how many end customers have been served, how many businesses use our product and the different milestones we’ve reached. Such a review creates a sense of community and the feeling like our customers are doing something unique.
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These are the top lessons we can learn from crowdfunding. Applying them to our digital marketing can help boost engagement and pick up on all the winning elements that make crowdfunding so popular.