Have you been sitting on a crowdfunding project idea for a while now? These 10 steps will help you to successfully launch it.
Step 1: Understand the principle of crowdfunding
With Crowdify’s “reward-based crowdfunding”, you decide on the target amount, your crowdfunding’s duration (3 to 50 days) and the goodies you’ll use to reward your boosters. Boosters can also choose to support you without receiving any goodies.
Most crowdfunding platforms use an all or nothing approach. If you reach or exceed the target amount, the money is paid out; if you don’t, the money is returned to the boosters. If you are unsuccessful, you don’t have anything to pay. If you are successful, most platforms charge a commission of around 10%, which also includes any credit card fees.
Generally, project initiators get money from 3 different sources: from family, friends and acquaintances (the crowd), from distant acquaintances and acquaintances of acquaintances (network) and from somewhere else (magic). Since this approach works from the inside out, it’s really important that you get your own crowd involved right from the beginning.
Step 2: Recognise opportunities to use crowdfunding as a marketing tool
Crowdfunding is more than just fundraising. A crowdfunding project generates:
- Reach: With crowdfunding, you generate a fan base that has supported your project from day one.
- Marketing: Crowdfunding is always a form of marketing as well. Your community shares your project on social media, media outlets report on it, etc. It’s a great way to actively advertise your product.
- Branding: People get to know your new brand, and that familiarity becomes firmly established through your regular interactions with your crowd.
- Pre-market check: Your project is a new product. If people buy it on Crowdify, the chances are good that it will also sell well on the market later on. But if your project doesn’t get support, it indicates that demand for your product isn’t as great as you perhaps thought.
- Open innovation: Crowdfunding is also a good way to check the market. If your project finds supporters, then you know you’ve got a chance when it hits the market.
- Sales channels: Are you looking to launch a new product or service, or do you need additional financial resources for an existing product or service? With a crowdfunding project, you can start selling it ahead of time.
- CRM: Use a crowdfunding project to build stronger connections to both new and existing customers.
Read more here: Crowdfunding = Marketing
Step 3: Schedule enough time for the preparation stage
We recommend spending at least 2 months on good preparation. You’ll need to take care of the following:
- Entering the project, see point 5
- Drafting the action plan, see point 6
- Drafting the communications plan, see point 7
- Planning the start, see point 8
It’s best not to do them one after another, but to start all 4 at once since they each have an influence on the others.
Step 4: Find the right platform for your project
In order to enter your project, you first need to choose a platform. Here are 3 points you should take note of when choosing your crowdfunding platform:
- The platform should be in the same location as your crowd. If your crowd is in Switzerland, choose a Swiss platform. If your crowd is in the US, look for a local platform in the US. There are 2 reasons for this: first, the language used on the platform is important (for example, in the US, you need a platform that is in English); second, the payment channels are too. The Swiss like to pay using local payment methods such as TWINT, and pay in Swiss francs.
- Does the platform offer support and expertise? Many platforms will share their know-how for a fee, others will do so free of charge, and many platforms offer little to no support at all.
- Is the platform more than just a payment channel? For example, does it also provide marketing tools such as free flyers, banners, sourcing or goody stores?
Step 5: Enter your project
You can easily register on Crowdify and enter and save your project. You can take as long as you need to edit your project. Once you think everything looks good with your project, you can submit it. We check and respond to all projects within 2 working days. We will either release it immediately, or we will send you our feedback. Projects can be published in 3 different languages (DE/FR/EN). This makes sense if you want to reach a German- and French-speaking crowd, as well as English-speakers and expats.
Target amount: Think carefully about whether your crowdfunding target amount is realistic. If you fail to raise the amount within the specified period, all the money raised will be returned to your supporters. To draw up the budget for your target amount: first calculate your actual project needs, then add the following items:
- 5% contingency fund
- Expenses for the goodies, including P&P
- PR/marketing expenses
- Platform commission (8–11%)
Project videos: From experience, we know that projects with videos are much more successful than those without. Making a video is important for a number of reasons:
- A video brings your project to life.
- You can create an emotional relationship with your boosters.
- You reveal the true you, making you more trustworthy.
- Viewers can see the person and the passion behind your project.
Project description: It’s always the same question with crowdfunding: how much funding do I want? Draft your project from A to Z and show why you need this exact amount, plus how it will be used. It’s important that interested boosters can understand what your project is about, the motivations for it and how the money will be used – all in under a minute. You should summarise this information in a short text and place it somewhere prominent on your website.
Goodies: We recommend that you come up with at least 4 to 6 different goodies for boosters with both big and small budgets. Goodies are often decisive in whether or not boosters are onboard with and support your project. It’s worth putting in a bit more time to offer the most attractive and creative goodies possible. Examples include unique experiences, personal invitations and handmade gifts. The more exclusive they are, the better. In need of some ideas? Why not take inspiration from the projects already on our website?
Step 6: Draft the action plan
In the action plan, you should define who your crowd is, which goodies they’ll find exciting and which touchpoints (channels/places) you will use to reach them.
Define your crowd: Draw up a list of everyone in your crowd and think about how best to reach them. Search through all your databases, email accounts, Facebook, Instagram, Twitter, Skype, LinkedIn, Xing, WhatsApp, Tumblr, WordPress, Students.ch, game platforms, business cards, lists of school friends, etc.
Goodies: Think about which goodies are best suited to your target group. If possible, use goodies that are also an advance order. This means that your supporters’ donations get them the service, or give them access to what you are developing and producing.
Touchpoints: Think about the channels you’ll use to reach your crowd, such as social media, emails, events or notice boards. Studies show that email touchpoints sell the most goodies. Social media is important because it gives you the opportunity to reach your crowd’s circle as well as your own crowd.
Step 7: Draft the communications plan
It’s important that you have a good plan for the duration of your project. Select tips and measures you want to use, and schedule an action plan. Come up with a plan for individual measures to show you when to do what. Ensure that the plan covers the entire project duration. Remember: The first third is the most important, you need to remain perseverant in the middle, and the final push will determine whether or not your project is a success.
Step 8: Prepare your start
Tell your closest crowd – your family, friends and acquaintances – about your project. Before you start (as soon as we have approved your project and you have decided on a start date), send them a preview of your project page. Get your closest crowd to support you right from the beginning.
Tips for day 1:
- Psychologically speaking, it’s important that the first booster isn’t alone, so make the first donation yourself (it doesn’t have to be a lot of money).
- Tell your closest crowd about your project launch.
- Use time-phased and personal goodies for the launch.
- You can offer your closest crowd goodies that are only valid for 24 hours, such as preferential conditions when they purchase your products.
Step 9: Make news
To really get your campaign going, it’s important to regularly post news on the different channels. Here are a few tips and tricks to keep in mind.
- Post your news on social media so that your friends can share it and so you can reach their network.
- Share news on the website. Thank all your boosters for their support. Crowdify even has a newsletter tool, so that you can write to all those that support you.
- Post news using videos too, not just text and images.
Step 10: Keep your crowd up to date
As soon as you have financed your project, keep your crowd informed with monthly updates, so they know what is happening with their money, and when the goodies will be delivered.