How do you set crowdfunding targets?
Not got long? Our video goes through our 3 tips in 1 minute
It’s all about keeping your eyes on the prize
Setting your initial crowdfunding target is likely to take a bit of thought. You’ll want to consider the minimum amount you need to raise for your project to be viable.
At the same time, you’ll no doubt have a wish list of other things you’d love to do! This is where you can plan for what your stretch target could be in the hope that you reach your initial target and go on to raise more.
Following on from our last Marketing Nugget about using storytelling to bring your crowdfunding vision to life, we’re looking at the nitty gritty of setting targets. We’ve got three steps you can take.
Crowdfunding targets step #1 – Be realistic yet challenging
This step might seem like a contradiction. But, if you can set an initial crowdfunding target that’s both realistic and challenging, it can go a long way to help you achieve crowdfunding success.
The thinking here is that you don’t want to set your initial target too low. Your target audience might think you’ll easily get there and may assume they don’t need to support you because others will.
Conversely, if you set your target too high then it might seem over ambitious. In this scenario your customers could think it is unachievable.
Setting a realistic yet challenging crowdfunding target is easier said than done and it’s different for every business as they have their own crowdfunding vision.
That said, you can be guided by the facts of the situation:
- Firstly, how much will you need to raise to make your big idea a reality? Start with the essential things that you need. (There’s more about the ‘nice to haves’ in step two).
- Secondly, look at the size of your current customer base. You could evaluate your average sales, social media following and any email subscribers you have.
- And thirdly, crunch some numbers. By this we mean ask how many of your current customers would need to support you and how much they would need to invest for you to reach your initial target.
Being guided by the facts will help you to sense check the situation and consider if you’ve got enough of a customer base to support you.
Crowdfunding targets step #2 – Plan for success
Your main focus is of course getting to your initial crowdfunding target. Essentially, it’s the minimum amount you need to make your business growth plans a reality.
However, there’s likely to be so much more you can do if your crowdfunding project becomes overfunded.
The hope is that you’ll achieve your initial crowdfunding target and be in the enviable position of setting a stretch target. This is where you move quickly to let your customers know you’re still very much crowdfunding and set another target.
Your list of ‘nice to haves’ comes into play at this point. The aim of the game is to have considered your stretch target options ahead of time and then quickly select the thing (or things) on your wish list that will make the biggest impact on your business and therefore your customers too.
Whilst you’ll have planned what your stretch target will be and have options for what the exact money raised will go towards, it’s good to select the specific thing (or things) at the time. You’ll want to see what your customer are loving about your crowdfunding efforts and then use this to guide your decision.
You could even find yourself in the position where you meet your stretch target and have to set a further stretch target. This is why it’s worth having a couple of things on your wish list.
This is what happened when we helped craft brewery, Brew York, with their crowdfunding efforts.
When they reached their initial crowdfunding target of £40k they set a stretch target of £50k. After they reached this, they set a further stretch target and ended up raising over £56k.
They were able to move quickly not only because we’d worked with them to consider their stretch targets ahead of time, but also because we made sure they were very logical additions to their crowdfunding story. This leads us nicely on to step #3.
Crowdfunding targets step #3 – Keep it real
This is about always taking what you’re looking to achieve back to what your customers get out of it.
See the situation and the crowdfunding targets from their point of view. Are you planning to do something they want?
You could use the classic marketing tactic of looking beyond the features of what your crowdfunding efforts will result in and considering the benefits to your customers.
Here’s the approach we took when we did Brew York’s crowdfunding campaign:
- Initial target = £40k
York’s biggest craft beer venue
Feature – a beer hall with 40 beers on tap and a street food kitchen
Customer benefit – a massive range of craft beer and great food to enjoy with it
- Stretch target = £50k
Small scale brewing kit
Feature – brewing on a smaller scale and therefore getting more experimental
Customer benefit – even more weird and wonderful brews for the 40 beer lines in the beer hall
- Further stretch target = resulted in £56,380 being raised
Contribution towards a canning line
Feature – with a contribution towards a canning line more beers will make it into cans sooner
Customer benefit – you can take more of Brew York’s beer home with you
Looking at the customer benefits is a great way to bring your crowdfunding targets to life and consider if your business growth plans will really appeal to your customers. After all, they have to want what you’ve got to offer if y0ur crowdfunding efforts are going to succeed.
Setting crowdfunding targets – a quick recap
We love a quick summary and now that we’ve gone into the detail, it’s time to reduce this Marketing Nugget down to a short list which can be easily digested:
- Step #1 – Be realistic yet challenging
You want your initial crowdfunding target to be ambitious, but not overambitious
- Step #2 – Plan for success
Consider a stretch target ahead of time so you can maintain momentum if you meet your initial target
- Step #3 – Keep it real
Always take what you’re trying to achieve back to the benefit for the customer
Fancy a chat?
If you’re considering your crowdfunding targets and looking for a crowdfunding marketing agency to help, please just give us a shout. We can have a chat over a coffee underneath the space rocket in our office.
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