Shattering the crowdfunding marketing myth – it isn’t easy money!
(But crowdfunding marketing campaigns are worth the effort!)
So you’re thinking of doing a crowdfunding marketing campaign?
Crowdfunding is big news at the moment. A fair few companies have done really well with crowdfunding and it’s helped them supercharge their growth.
You might think of what they’ve done as crowdfunding marketing activity, a crowdfunding campaign or even crowdfunding promotion.
Essentially, they’re all the same thing and more likely than not they will have worked with a crowdfunding agency or a crowdfunding marketing agency (again they’re the same thing) to increase their chances of success.
Not only does crowdfunding provide much needed investment to fuel business growth, but it also creates a community of highly engaged and increasingly loyal supporters. This in turn increases levels of brand awareness and helps businesses grow further.
There’s a lot more to crowdfunding promotion than initially meets the eye
For every successful crowdfunding campaign, there’s a whole of host of unsuccessful campaigns lurking on the many crowdfunding platforms out there!
This is our first Marketing Nuggets nitty gritty guide and here you’ll find out what it takes to successfully run a crowdfunding marketing campaign.
We’ve outlined the top 10 questions to consider if you’re thinking of crowdfunding and/or you’re at the stage where you’re looking for a crowdfunding agency to help you.
We like to think of each question as being a little nugget of marketing wisdom, which will help you on your crowdfunding journey.
If you like what we’ve done here, the good news is there’s more on the way! We’re going to be doing further marketing guides and if you’d like to know when they’re available you can sign up to our Marketing Nuggets email newsletter!
First thing’s first – let’s shatter the crowdfunding marketing myth
It really is time to shatter the crowdfunding marketing myth that it’s easy money. Crowdfunding really isn’t easy money! As a crowdfunding marketing agency, we know just how much hard work it takes to make a crowdfunding campaign a success. But, that’s like most things in life and it’s no reason to hold back!
The biggest challenge is letting your target audience know that you’re crowdfunding as you need their support for it to be a success. They need to see your crowdfunding promotion and buy into it.
Getting your target audience on board
Thinking of it in terms of running a crowdfunding campaign or doing crowdfunding marketing makes sense. If nobody knows you’re doing a crowdfunding promotion, how will they know to invest?
Crowdfunding can be a great alternative to getting a bank loan if you get it right. The key thing is doing the crowdfunding promotion activity needed to encourage your target audience to invest.
Right now you’re probably asking, ‘What do they know about crowdfunding marketing?’
And that’s a great question. With so much info out there just a quick Google search away, it’s essential to know that the stuff you’re reading is credible.
We’re a crowdfunding marketing agency based in Yorkshire and we started a revolution with craft brewery, Brew York.
We did the Brew York Revolution crowdfunding campaign, which helped them raise over £56k in 21 days through rewards-based crowdfunding.
Their crowdfunding marketing campaign was all about uniting craft beer lovers and rewarding them.
Opening York’s biggest craft beer venue
Our crowdfunding promotion helped the guys at Brew York raise 41% more than their initial crowdfunding target of £40k. It helped to make their ambitious expansion plans to open York’s biggest craft beer venue a reality.
Our role as their crowdfunding marketing agency was to let Brew York’s craft beer loving target audience know what they were doing.
And our creative idea, the Brew York Revolution, did the trick. This was just the starting point though. That said, it’s arguably the most important thing we contributed as the crowdfunding marketing agency. People buy into ideas and we needed to develop a creative idea to structure the whole crowdfunding campaign around.
One creative idea resulted in over £56k
In just three weeks, our Brew York Revolution idea helped the guys raise £56,380 to be precise. The successful crowdfunding campaign resulted in a beer hall with 40 beers on tap and a street food kitchen, as well as the Hoptail Lounge (that’s beer + cocktails = hoptails). It also covered the purchase of a small-scale brewing kit so even more weird and wonderful beers could be brewed up!
It’s fair to say that the guys at Brew York we’re happy they picked us as their crowdfunding agency, but don’t take our word for it see what they had to say. And here’s an overview of the various marketing activity we did for the Brew York Revolution crowdfunding marketing campaign.
Worry not, this isn’t any crowdfunding agency hard sell
That would be painful and wrong. We don’t think that hard sell has ever really worked and we hate it when people do it us!
We just know that a lot of businesses are thinking crowdfunding might be for them and at the same time are thinking they don’t know that much about it.
Want to learn more about crowdfunding?
Then you’re in the right place. You’ll probably be interested in the top 10 questions you could ask yourself before taking the plunge into the world of crowdfunding promotion.
It can be described as crowdfunding promotion because one of the most important things to do when crowdfunding is to shout it from the roof tops.
The aim is to get as many people in your target audience interested in and talking about what you’re doing. If you do, they will in turn get more people interested and so on!
And here are the top 10 questions…
Just click on the links below to jump to any of the questions:
1. What type of crowdfunding campaign would you do?
There are two types of crowdfunding campaign and they’re known as rewards-based and equity-based. This is probably the biggest crowdfunding decision you’ll make. You may or may not have made it before you decide it’s time to start working with a crowdfunding marketing agency.
Here are the main differences between rewards-based and equity-based crowdfunding marketing:
Rewards-based is more straightforward
It’s simply a case of offering a reward to your customers. The reward itself can take many forms such as:
• A cracking deal that offers great value
• A behind-the-scenes experience
• Something to the value of the amount contributed
• At the most basic level, a simple thank you
You’ll know from your own experiences as a consumer that us humans are hardwired to love a cracking deal. We also love getting access to something we wouldn’t usually have access to. This is where rewards-based crowdfunding campaigns can really come into their own!
Doubling money in beer
For the Brew York Revolution crowdfunding campaign, the guys at Brew York doubled people’s money in beer.
The ‘Double Your Money’ reward very much did what it said on the tin. It doubled the hard-earned pennies of beer lovers in the form of a reward card that could be spent over a period of two years! Essentially, it provided Brew York’s weird and wonderful beers half price and was a great crowdfunding promotion to shout about.
The beauty of rewards-based crowdfunding is that it can be done relatively quickly. It’s not as complex as equity-based so you can get going with your crowdfunding promotion quickly and in turn growing your business.
Equity-based crowdfunding is more complex
It’s a different beast altogether, but that’s not to say different is bad. It’s just that it’s more difficult and therefore takes longer to do.
Put simply, it involves offering equity in your business in the form of shares, which pay dividends to your group of financial investors.
It’s harder to do because before you embark on any crowdfunding marketing activity, it requires a valuation of your company. This involves going through a due diligence process to ensure you’re doing everything in the right way.
Now we know this isn’t the most exciting part of the guide, but it’s important stuff if you go down the equity route.
It’s a financial investment just like any other
And because it’s a financial investment, it requires what’s known as a ‘capital at risk’ warning. This would be included on the crowdfunding promotion that you do.
This basically means that you need to balance any potential rewards with the risks taken. A key part of doing this is letting your financial investors know that the value of their investment could go down, as well as up.
Admittedly, this is quite dry stuff but it’s a legal requirement and not something you can ignore unfortunately.
Seeing as we’re talking about craft beer
Brew Dog’s Equity for Punks is a great example of equity-based crowdfunding. In the past 10 years, they’ve raised in the region of £70 million through their crowdfunding marketing efforts.
Crowdfunding marketing has helped them to grow into an international craft brewing behemoth.
They’re currently navigating the stormy seas they find themselves in as a result of being an increasingly mainstream brand. Undoubtedly, they’re a big brand now, but at the same time they want to be disruptive in the big brand beer market!
It’s fair to say they’re quite ahead of the curve with crowdfunding. This is exactly what you’d expect from a brand which sent tanks around the streets of London to promote Equity for Punks!
We’re definitely not suggesting you get a couple of tanks and go on an adventure to promote your crowdfunding campaign. But, it does show how important it is to live your brand by being bold and memorable.
There are some similarities though
Whilst rewards-based and equity-based crowdfunding are quite different, there are also similarities.
The main thing is the crowdfunding marketing campaign you’ll do. You’ll probably want to work with a crowdfunding agency so that they can develop a creative idea to fuel your campaign.
They’ll get all the messages just right so that your target audience really gets what you’re doing and is interested in investing.
And there’s more – as well as growing your business, both rewards-based and equity-based crowdfunding will also:
• Build brand awareness
• Develop an increasingly engaged customer base
• Increase customer loyalty
2. Are you at the right stage of business growth to do crowdfunding promotion?
If you’re thinking about what type of crowdfunding promotion to do, a good place to start might be sitting down and really looking at your business.
A few more questions
Nobody likes a question being answered with another question, never mind a list of even more questions. But, we’re going to risk doing it anyway.
We think answering these questions about crowdfunding promotion is the best way to answer the bigger question about business growth.
We don’t think we’d be doing our job as a crowdfunding agency if we didn’t go into the nitty gritty detail of the things it’s worth considering. So here goes:
- Where is the business currently at?
- Where do you want it to go in the future?
- What’s your next step to get there?
- Do you want to move quickly and offer rewards?
- And if so, what rewards would you offer?
- Do you have the resources needed to get your company valued for equity-based crowdfunding?
- Have you got the time to go through the due diligence process required for offering equity?
It’s worth taking the time to consider these questions as in the answers you’re likely to find the right next steps for your business. And remember, you’re likely to need some financial advice especially if you’re thinking that equity-based crowdfunding could be for you.
Crowdfunding isn’t a silver bullet
Whilst crowdfunding promotion is appealing, it doesn’t offer untold fortunes for your business in a short space of time.
You need to have an engaged customer base of people who are aware of your brand and are already buying from you.
This makes crowdfunding marketing for start ups quite a challenge. If nobody knows who you are, what you’re selling or what your brand stands for why would they want to invest in you? And what’s more, how would they know about what you’re doing?
No matter how much you work with a crowdfunding agency to develop a quirky and creative idea, such as a craft beer revolution, if you don’t have a customer base your campaign won’t succeed.
And here lies arguably the most important requirement for crowdfunding (regardless of whether it’s for rewards or equity) – you need to have a group of customers who love what you’re doing so much that they’re interested in investing.
It’s all about the love
That’s right – they need to love what you’re doing as this is what will make them buy into your crowdfunding promotion. Just liking what you’re doing isn’t going to be enough to get people to part with their cash for your crowdfunding campaign.
And there also needs to be a great reason for them to invest. This could be a cracking deal or the opportunity to invest in a growing business – more about this later!
By definition customers are the one thing that start ups don’t have. The irony of the situation is that this is the time when they need investment the most.
This is where taking a medium-term view can really work. Is crowdfunding something which you could work up to when you’re moving from the start up to the scale up phase?
As a start up, you could ask yourself how you could get to the point where you’re ready for crowdfunding in the future. This will undoubtedly involve building up your customer base and getting to know exactly who your customers are.
3. How well do you know your customers and would they be interested in your crowdfunding marketing?
It’s essential that you have customers who love what you’re doing and who are already buying from you. As well as this, you really need to know who your customer are and what it is they love about your business. These are key ingredients for your crowdfunding promotion to be a success.
Be driven by insight
Little pieces of insight (or gems of wisdom as you might like to think of them) about your customers can really help you. These little gems will provide the clues to what sort of crowdfunding promotion they’ll really get excited by.
Start with what you know about your current customers. Whilst demographics are helpful they only provide part of the story. Of course, it’s important to consider age, gender, income bracket and location. But, also dig a bit deeper and it will be well worth the effort.
Going beyond demographics
Think about what really motivates your audience. With the Brew York Revolution crowdfunding campaign, we found that demographics didn’t really provide that much insight.
The craft beer lovers were aged between 18 and 80+ years old. There was a pretty good gender balance and a mix of different types of people.
The thing that united them was their love of weird and wonderful brews. They were sick and tired of bland, boring beer.
Keep digging deeper
As we explored further, we got to the point where we discovered it was about the fact that Brew York is welcoming and inclusive. It isn’t a place that’s too cool for school.
Instead, everybody is welcome and that includes little people and four legged furry friends! In other words – you can take your toddler, your grandad and your dog!
This provided a great starting point for the crowdfunding marketing activity, as it was all about bringing craft beer lovers together.
4. Have you got something people want which you can structure your crowdfunding campaign around?
You’ve got customers who love what you’re doing and you know them well. The next step is to consider what you offer them as part of your crowdfunding marketing campaign.
Equity is about the financial investment
If you’ve gone down the equity route, then it’s as simple as shares in your business and communicating your future plans for business growth.
In many respects, the proposition is all about how the financial investment stacks up against other investments (always bearing in mind that good old ‘capital at risk’ warning and the fact that investments can go down, as well as up).
This is where you’ll want to have a balance between the must-have financial information and the story which brings your business growth plans to life.
Arguably less is more with reward options
If you’ve opted for rewards-based crowdfunding promotion, this is where there are a lot of options open to you.
You might already have a good idea of how you want to approach your rewards and your crowdfunding agency will be able to help with considering the finer details.
How many rewards would you offer? You don’t want to offer too few rewards as some people will want a great deal and others could be interested in behind-the-scenes experiences. On the other hand, you don’t want to offer too many rewards as you could overwhelm your target audience.
Step into the shoes of your customers
It’s easy to see why certain rewards really get people investing.
Think of it from the perspective of your target audience. If they’re going to part with their hard-earned pennies, especially if it’s for a reward which will be drip-fed back to them over time, they want to see a return on investment themselves.
Granted they might think of it more as half price beer for months to come rather than return on investment, but the outcome is the same.
The Brew York Revolution was a mix of the ‘Double Your Money’ reward and behind-the-scenes experiences for beer lovers. Most people wanted to double their money and invest in their beer future.
It was the biggest of beer lovers who wanted the experiences such as learning to brew!
Don’t forget the admin and the big launch
Think about the admin involved in offering your range of rewards, not only whilst you’re doing your crowdfunding promotion, but also afterwards when you’re fulfilling the rewards.
Your crowdfunding agency will focus on the marketing and promotional activity. There’ll also be organisational things which will need to be sorted from your end.
Whilst your crowdfunding agency could help with these, the best approach is to use your budget for their specialist support and cover off the organisational things yourselves in-house!
Things to consider could include:
- Would you use electronic gift cards to track a ‘Double your money’ style reward?
- Have you thought about how long any rewards would be valid for?
- How would people book in behind-the-scenes experiences?
- Would you offer a series of different dates for experiences?
Think about what you’re working towards
How often would you update investors on the progress of your business growth? When would you have a launch event? Investors would love to get priority access and it’s important that you make them feel valued.
Again more questions, but they’re definitely worth considering at this stage! There are no right or wrong answers here.
There are so many variables with each business being different. It’s more about starting with what your customers want and working out your next steps from there.
5. How will you bring your crowdfunding campaign vision to life?
You’ve decided to do crowdfunding promotion because it’s the right next step for your business. You know you could have gone to the bank for a loan or got investment elsewhere, but your customers wouldn’t have benefitted from that.
Alternatively, it could be that you have a master plan, which involves a bank loan and/or other types of investment, as well as a crowdfunding campaign.
The thinking here is that whilst you could fund your business growth through loans and/or investment, they don’t help you to take your customers on a journey with you! And so, crowdfunding has an important role to play.
Either you’ve got rewards which you think your customers will love or your business is ready to offer equity. As well as this, you’ve also got a plan for where you want to take your business.
These are the two main building blocks of your crowdfunding campaign. The next thing to do is to pull all this together and use storytelling to bring your vision to life.
Mix logic and emotion
It might seem a bit of a tacky way to think of it, but ‘hearts and minds’ is a great description of how people will decide to invest in your crowdfunding campaign.
The logic is the ‘minds’ bit. It’s all about the great deal and the investment stacking up. People need a reason to part with their money. This is especially true if there is a time lag between the point at which they say ‘yes’ to your crowdfunding promotion and when they get their reward.
The ‘hearts’ is something all-together different. It’s not just one thing. Part of it is of course your customers’ love of what you’re doing and desire for more of it.
There’s also another part, which is arguably more important. It’s getting your customers to be part of something bigger.
With Brew York’s crowdfunding marketing, it was about joining their craft beer revolution. This in turn meant wanting a bigger, better Brew York with more beers, more street food and more events.
See the bigger picture
Of course, the main aim is for you to raise the much-needed money to grow your business, but it isn’t as straightforward as that. Nothing is ever as straightforward as it seems!
Your customers not only need to benefit from investing, but also benefit from your business growing. It works on two levels for your target audience.
With the Brew York Revolution, craft beer lovers benefitted from half price craft beer by doubling their money. They also benefitted from Brew York opening York’s biggest craft beer venue.
Be clear on what’s in it for your customers
Now Brew York has been expanded, it has a beer hall with 40 beers on tap and a street food kitchen. It also has the Hoptail Lounge serving beer cocktails and more beer festivals. And the cherry on top is the small-scale brewing kit, which means more experimental beers can be brewed.
And this is all in addition to the Tap Room, which had been there since they first opened their doors.
6. Have you thought about the targets for your crowdfunding promotion?
If you know how you want to grow your business then thinking of your crowdfunding target should be a relatively simple next step.
All of your crowdfunding marketing activity will be focused on helping you to achieve your target. It’s the job of the crowdfunding marketing agency you choose to work with to tell you the best marketing activity, which will help you achieve your target.
Keep your eyes on the prize
Thankfully if you’re offering rewards, setting your target isn’t about slavishly listing out what you would spend the money on. That said, you’re likely to have a spreadsheet with this level of detail on it behind the scenes.
Think about your crowdfunding promotion target as your initial target – it’s the minimum amount you need to make your dreams a reality! It’s all about really focusing on what you’re trying to achieve.
In contrast if you’re offering equity, your target will be informed by the amount your company has been valued at.
Once you’ve set your target, you can move on to clearly telling a story which brings everything to life.
It’s about the broad brush strokes
For example, would achieving your target mean that you can fit out the kitchen or decorate the place? Think of how your initial target would be divided up into several smaller pots that really provide an insight into what you’re looking to do.
The good news here is that you don’t need to go down to the nitty gritty detail of how many lightbulbs you’ll need!
It’s important that your initial target is realistic and achievable, whilst at the same time challenging enough and is something to really aim for. Admittedly, it’s quite a balance to strike!
Think about a stretch target ahead of time
There’s likely to be so much more you can do if you get further investment. This is where the stretch target comes in. Consider what you’d put any additional money raised towards.
It’s worth thinking of this in advance. If you do, you’ll then be able to act quickly if you reach your initial target and maintain the momentum of your crowdfunding promotion.
It’s fair to say that it’s not enough to simply increase your target. We wouldn’t recommend this as a crowdfunding agency. It’s all about making what you’re doing real and clearly explaining what the money raised will go towards.
With the Brew York Revolution, the stretch target was all about raising enough additional investment to purchase a small-scale brewing kit. This meant that more experimental beers could be brewed in smaller batches.
How would you stretch even further?
You might even want to consider a further stretch target in case you get into the position where you’ve met your stretch target. You could be in the situation where you’re looking to increase the amount you want to raise for a second time just like Brew York.
Once the guys got to £50k, they said that further investment would go towards getting a canning line sooner so that more of their beers could go into cans! They ended up getting over £56k and were a step closer to their canning line as a result.
7. Have you considered the resources needed for your crowdfunding campaign?
There are lots of crowdfunding platforms out there. Once you’ve decided if you’re offering rewards or equity, it’s good to take a look around and see what one would work best for you. Take the same approach with your crowdfunding marketing agency and you’ll find the right fit for you.
Consider the costs of crowdfunding
The Brew York Revolution was on Crowdfunder, which is one of the main rewards-based platforms. One of the equity-based platforms worth checking out would be Crowdcube.
Bear in mind that the crowdfunding platforms charge a fee. The FAQs section is always a good place to start when wanting to learn more about how things would work on a specific platform.
It’s also worth considering the budget you would need for your crowdfunding promotion and the crowdfunding marketing agency you want to work with to get your message out there.
You can then look at the costs in relation to your initial target and consider the return on investment. You’re likely to find that it will be in the 100s of percent.
Crunching the numbers
Getting comfortable with the numbers is key to any form of business success and this is equally true of crowdfunding. Return on investment calculations are a three-step process and it’s well worth spending some time looking at the figures.
Here’s how the calculation works:
Total money raised from crowdfunding – the cost of crowdfunding
= Money available to invest in your business growth
Money available to invest in your business growth / cost of crowdfunding
= Return on investment rate
Return on investment rate x 100
= Your return on investment as a percentage
And, here’s an example
If you were looking to raise £50,000 and you spent £9,500 on your crowdfunding efforts then the calculation would work like this:
£50,000 total money raised from crowdfunding – £9,500 cost of crowdfunding
= £40,500 money available to invest in your business growth
£40,500 money available to invest in your business growth / £9,500 cost of crowdfunding
= 4.26 return on investment rate
= 4.26 return on investment rate x 100
= 426% return on investment as a percentage
This would give you a good basis for considering the size of the business opportunity available. It will also help with putting the costs of the platform fees and crowdfunding agency in context of the overall potential reward.
Think of the other resources needed
Time is also another resource you’ll want to consider. Factor in the time required to answer queries from people who are interested in investing. It will also take time to fulfil the rewards or issues the shares.
It’s easy to assume that the things you need to do will be absorbed into the normal running of your business, but we bet your days are already pretty busy.
Given that there are only 168 hours in a week, it could be worth looking at what you could change around in your business or even things that you could stop doing for a while. This would help to free up the time needed to get the most out of your crowdfunding activity.
Gaining and maintaining momentum
Whilst we’re on the subject of time. It’s important to also think about timings. The good old saying ‘Time is everything’ definitely applies to crowdfunding campaigns. This is in terms of both how long you want to crowdfund for and at what time of the year.
When considering the duration, think about the balance between gaining and maintaining momentum. Again, this is something you can talk to your crowdfunding agency about.
The rewards-based platform Crowdfunder say that in their opinion the optimum time for crowdfunding promotion is between 21 and 28 days. There does seem to be a logic to this and our experience as a crowdfunding marketing agency does support this.
Not too long, not too short
It’s important to give yourself long enough to raise awareness of what you’re doing and give your target audience time to consider supporting you, as well as then go on to actually invest. At the same time, you don’t want to be out there too long and lose your momentum.
There will be a spike of interest at the start and the end of your crowdfunding campaign. You’re likely to find that a lot of people will invest at the last minute. Doing things right down to the wire is a big part of human nature after all.
Look at what’s already happening in your business
Seasonality and how it impacts your business is a key thing to consider. You know your business inside out and your crowdfunding agency will come with a fresh pair of eyes to consider how to best work the timings.
If you crowdfund during your busy period there might be too much going on and your target audience might be distracted. Equally, you might not want to crowdfund in your quiet season and struggle to get interest.
The timing really depends on the nature of your business and the type of product/service you offer. Fast moving consumer goods, which are everyday items, are bought quite differently to luxury items.
No right or wrong answers
You might think that before Christmas is a great time because your target audience could invest as a gift for someone else (and maybe even a gift to themselves as well). Conversely, you might think that there’s just too much going on at that time of year.
Again, there are no right or wrong answers here. It’s about considering what would work best for your business and looking at any data that you currently have to inform your decisions. And dare we say it – a little bit of gut feeling might come into it as well!
We’ve heard that gut is your brain processing all of your experience over the years faster than you can realise. We think it’s a great way to explain that funny little feeling we all get from time to time.
8. Can you move quickly when your crowdfunding marketing is under way?
Launching your crowdfunding campaign is only just the beginning. This is when the real fun begins. At this point, you’re really in the thick of your crowdfunding promotion activity. Now isn’t the time for you or your crowdfunding agency to take a break!
Have a test and learn mindset
Essentially, when you launch you’re testing out how your crowdfunding marketing campaign lands with your target audience. The aim of the game here is to quickly learn from what you’re seeing. You then adapt your crowdfunding marketing activity as a result. This might sound like a lot of work, but your crowdfunding marketing agency will do most of this.
The trick is responding quickly and being able to get updated messages out there as soon as possible. This will not only give you a greater chance of success, but it will also let your target audience know you’re interested in them and what they want.
Human behaviour can be tricky to predict
We’d all like to have a crystal ball, which predicts how our target audience will respond to our crowdfunding promotion. If only you could order one online and it appeared on your doorstep the very next day!
Until that happens, the next best thing is testing and learning. It used to be known as trial and error before we didn’t want to be too negative about things – it has to be said, we do love positivity though. Look for positive things and find positive things, look for negative things and find negative things, but we digress!
Back to the business of crowdfunding promotion and what we did as Brew York’s crowdfunding agency. With the Brew York Revolution, we knew that craft beer lovers would be interested in doubling their money. We just didn’t know how interested they would be. Quite quickly, we saw that most people wanted the ‘Double your money’ reward.
We opened the Bank of Brew York
We focused on marketing messages about investing in your beer future and a 100% interest rate. It was all very light hearted in its tone and deliberately wasn’t overly complex.
The thinking here was that the Brew York Revolution was a big, bold idea that aimed to capture the imagination of craft beer lovers and unite them. There simply wasn’t room for another big creative idea (no matter how many we had as their crowdfunding agency). It would have been too confusing. Something that does what it says on the tin was the way to go.
Always doing the right thing – even when it isn’t the most creative thing
We couldn’t water down the revolution idea. This was the main thing we wanted people to remember and buy into. For us as the crowdfunding marketing agency, doing something quite simple with the affectionately named Bank of Brew York was a bold decision in a completely different way.
We had to resist the urge to be creative. At this point, it was ultimately about helping the guys to successfully crowdfund. We already had enough creativity in the mix. Just like cheese, chocolate and many of the other amazing things in life, you can have too much of a good thing!
Moving at pace
It’s not just after launch when you need to move quickly. You also need to get your running shoes on if you reach your initial target and set a stretch target (and even a further stretch target).
As well as this, it’s important to move fast near the end of your crowdfunding promotion. You’ll need to let the last minute people know that it’s the last minute and get back on their radar!
You want to have different things to say at different times as this will keep your target audience interested. Nobody wants to see the same messages over and over again.
It’s all about letting your target audience know how your crowdfunding marketing campaign is progressing and where it’s currently up to.
Don’t forget the practical things
As your crowdfunding campaign progresses, you’ll undoubtedly get questions from prospective investors and it’s a good idea to produce initial FAQs for launch so that you can quickly add to these as queries come flying in.
Planning ahead will mean that you can be more flexible when you need to be.
9. Do you know how people make decisions especially when they’re investing in a crowdfunding campaign?
Human beings are strange creatures at times. It certainly is true that we can be tricky to predict. And so, understanding a bit about how we make decisions can really help tackle this problem and in turn help your crowdfunding campaign.
Adding a bit of science into the mix
This is where behavioural science comes into play. It’s the study of human behaviour and how we make decisions.
You wouldn’t necessarily expect a crowdfunding marketing agency to be talking about science. But, in actual fact, it’s the mix of creative ideas and the more logical things such as the science of decision making, that’s the most important thing.
The same goes for getting into the detail of the results and what the numbers are telling us.
Creativity and logic combine to result in the most effective marketing activity whether that be crowdfunding promotion, social media or email marketing.
Behavioural science studies into the intriguing wiring in our brains have shown that if you offer a group of people £1 today or £2 in the future most people will choose £1 today. This is because they can have it in their hands now even though it’s the worse deal.
In behavioural science, this is known as the incentives driver. It recognises the fact that we prefer smaller amounts now as opposed to larger payments in the future.
It’s essentially wanting instant gratification. It also explains why people struggle to save for retirement as they want to spend smaller amounts of money now rather than wait for the larger lump sum when they retire.
So hopefully, you can then see that in offering crowdfunding rewards, which pay off in the future, you’re fighting human nature.
At this point you might be thinking, ‘This isn’t good news!’. But, as problems go, it really isn’t that much of a dealbreaker for your crowdfunding promotion.
Rather, it’s something you need to be aware of and work around. You can ask your crowdfunding agency for ideas on how they can tackle it with the creative ideas they come up with. After all, that’s why you’re working with them!
How we’re wired as humans
We also know from behavioural science studies that people struggle to imagine themselves in the future. This is another reason why people don’t often save for retirement. It also explains why people continue to do things which they know are bad for their health.
And as a side note – this is why marketing campaigns for retirement often focus on imagining your future self. They ask what you want your life in retirement to be like. This certainly is interesting, but let’s get back to the business of craft beer.
When the Bank of Brew York opened, it had a little bit of behavioural science weaved into the crowdfunding promotion messages. It focused on ‘Investing in your beer future’.
Through using a quirky approach, it was possible for us as the crowdfunding marketing agency to tackle one of the biggest challenges without being too serious.
Tapping into FOMO – the good old ‘fear of missing out’!
As humans, we’re also hardwired to want to know that we’re doing the same thing as other people.
We like to think that we’re individual and unique (and in many ways we are). But, when we think we’re missing out on something, we act quite differently. We want to know that we’re like other people. This is what’s known as norming.
It explains why we don’t want to go into an empty restaurant, but as soon as there are a few people in there, it must be a good place and the reviews must be right!
The same applies to crowdfunding marketing. Put simply, the more people see that others are investing, the more likely they are to invest themselves. If you think of norming in another way, it’s good old FOMO.
Norming is a key part of how crowdfunding campaigns gain momentum. We used a little bit of norming with the Brew-o-meter, which tracked how much the Brew York Revolution crowdfunding campaign had raised.
Gaining momentum and tracking progress
Every time another £5k was raised the Brew-o-meter dinged again. Reaching the next level of investment was promoted with a series of social media posts. The regular dinging of the Brew-o-meter was one of the main parts of the crowdfunding promotion.
As the crowdfunding agency, our thinking here was that we wanted to thank the people who had invested and also shout about the investment coming in. We knew that this would in turn encourage other people to think about joining the Brew York Revolution.
10. Are you ready for a community of supporters following your crowdfunding marketing activity?
As a crowdfunding marketing agency, we know that successfully achieving your target isn’t an easy job. It takes a lot of planning and crowdfunding marketing activity.
As well as this, it requires organisation afterwards to fulfil rewards and resource to keep your investors updated.
So, what’s next?
The end of your crowdfunding promotion is the start of a new phase of your business growth. You’ll be focused on using the money raised to achieve what you set out to do.
You’ll also now have a group of people who’ve invested and will become increasingly loyal customers. It’s important that you communicate with them regularly and update them on progress. Basically, show them how much you love them and what they’ve done for your business.
Creating a group identity
Now is the time when you can bring your investors together with a group identity. For the Brew York Revolution, we created the Brew Yorkers.
Our thinking here was:
Brew York + Brew Lovers = Brew Yorkers
This is a deliberately quirky play on New Yorkers. Once the Brew York Revolution crowdfunding campaign was over there was room to bring in another big, bold concept.
The Brew Yorkers concept featured on the crowdfunding reward cards and really helped to take the crowdfunding promotion to the next level. This was the second big creative idea we contributed as the crowdfunding agency.
It helped to build a real sense of identity with the 631 people who between them had invested over £56k to make York’s biggest craft beer venue a reality.
Keep the future in mind
An increasingly loyal group of supporters who have invested will be interested in new products you develop and events you organise. They’ll also be more likely to recommend you to family and friends.
Their love of what you do becomes a virtuous circle. This is the opposite of the vicious circle we all try to avoid. You need to keep communicating with them and letting them know how much you value them.
Building your community is also about looking even further into the future and considering where you might want to take your business after your current stage of growth.
Where could you go next?
If you did rewards-based crowdfunding, it might be that as you grow further it’s the right time to do equity-based crowdfunding. You could offer your loyal supporters the chance to invest first.
And, if you did equity-based crowdfunding, it could be that you’re ready to offer another round of investment.
Crowdfunding marketing is about a lot more than raising money for business growth.
If you think of your crowdfunding promotion in terms of return on investment, the most obvious return is of course the money you’ve raised. But, you’ll also get a return from increased brand awareness and customer loyalty.
There isn’t a formula for a great crowdfunding campaign. It’s about doing the right thing for your business at the right time.
As well as this, it’s about finding a crowdfunding agency, which is a good fit for your business. You want them to really understand what you’re all about so they can develop a great creative idea that resonates with your customers.
The ingredients for crowdfunding
From our experience, we’ve learnt that there are five main ingredients for crowdfunding promotion. When these are combined they can give you the greatest chance of success:
1. A story and a vision for your business
2. An already engaged target audience
3. Rewards people want to invest in or a strong business plan for equity-based crowdfunding
4. Initial levels of brand awareness
5. Shouting about the fact that you’re crowdfunding
Crowdfunding isn’t easy money
It’s fair to say that the easy money thing is the biggest myth surrounding crowdfunding promotion.
The campaigns which have been successful might have appeared to have just flown. But, if you could have looked under the surface, you’d have found a lot of different moving parts all working together.
Even if you go for the more straightforward rewards-based crowdfunding, it requires a lot more than starting the project online and hoping for the best.
Unfortunately, crowdfunding promotion isn’t as simple as ‘Build it and they will come’ to quote the 1980s classic Hollywood film ‘Field of Dreams’.
But, this is where a crowdfunding agency can help. They’ll develop creative ideas, which will really bring what you’re doing to life. This will in turn capture the hearts and minds of your target audience and encourage people to invest.
The truth about crowdfunding marketing campaigns
The good news though is that crowdfunding offers businesses a way of taking their customers on their business journey with them. It’s a different (and still relatively new) way of financing growth.
It’s not an easy thing to do, but that’s true of most things in life. Building a business to the point of being ready to crowdfund wouldn’t have been easy either!
We’re currently at the stage where enough businesses have already done crowdfunding and as a result a lot of lessons have been learnt.
At the same time, crowdfunding is still new enough that not everyone is doing it. And so, the businesses that do it really stand out. We’re in a bit of a sweet spot.
The most important thing you need
At risk of repeating ourselves – the biggest thing is having a group of customers who already buy from you and love what you’re doing. Without this, you have nobody to invest!
That said if you’re not there yet with the customer base, it isn’t all bad news. You can ask yourself how you can develop a close relationship with your customers. As a next step, you can really get to know them so that you’re ready to crowdfund in the future.
Taking a medium-term view here can really help. After all, businesses which are ready to scale up now were start ups not too long ago. We all have to take the baby steps first, move on to walking and then progress to running!
And if you’re at the running stage and ready to scale up, it’s exciting times!
If you’re wanting to start your own revolution or such like and are looking for a crowdfunding agency to help, please just give us a shout. We can have a chat over a coffee underneath the space rocket in our offices. Yes, it’s a real-life space rocket, but fear not, it’s been decommissioned!
And just to add – thanks for reading! We know there are a lot of things out there competing for your attention. We hope you now have a good idea about whether crowdfunding is for you!
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The small print (which isn’t small because it’s important)
This guide isn’t intended to constitute financial advice in any way. As a crowdfunding agency, our aim here was to shatter the myth that crowdfunding is easy money.
At the same time, we wanted to outline how crowdfunding can help with business growth. Most importantly, we wanted to give you some questions to consider if you’re thinking of crowdfunding.
Hopefully, this guide has been super helpful. We’re pretty sure that as a next step, you’ll want to go on to research crowdfunding in more depth. This will most probably involve getting any financial advice you might need, especially if you’re thinking that equity-based crowdfunding could be for you! Unsurprisingly, as marketers financial advice isn’t our thing! Thanks again for reading!