The 10 steps of the perfect crowdfunding campaign

Modern marketing is made up of a series of activities that evolve every year and create new market opportunities that, just a few years ago, we would not have even imagined. Let's think about through crowdfundingthe founding theme of this article.

Throw one crowdfunding campaign it means methodically planning every single step according to a very precise scheme. Here, as in any other marketing segment that Innovando uses for its SMEs, improvisation is never contemplated. It is therefore no coincidence that the majority of crowdfunding operations managed "on boarding" inevitably fail. Sometimes it happens because some important step has been skipped, while other times we end up being too hasty in wanting to finalize the project and raise as much money as possible in the shortest time.

What is crowdfunding?

Crowdfunding is a type of financing project which, contrary to traditional methods, comes from below – or by the consumer himself. It is crowdfunding when a large number of people see an embryonic project and are so impressed by it that they want to finance it, investing economically in its implementation. Even small figures which, added together, create a substantial starting point for the launch of a commercial project.

The term crowdfunding derives from the English words "crowd", or crowd, and "funding", or financing, and indicates all those practices aimed at finding funds through the community or the crowd. It defines itself microfinance business precisely because the people who decide to endorse your project freely choose the amount to invest, which is usually quite small.

There are various types of crowdfunding, but the only one that is fully regulated in Italy concerns the model equity. Equity allows investors to obtain participation in the company's financial structure, obtaining equity instruments in the risk capital of the financed project with the set of patrimonial and administrative rights that derive from it.

Excellent examples of crowdfunding

We could be here all day listing you examples of successful crowdfunding, going to cover a huge slice of the market. For reasons of time and practicality, we have chosen some practical examples to submit to you to give you an overall idea of ​​this great world that is just waiting for your idea to include you in its infinite possibilities:

  • Rebuild to repair. Let's start with an excellent and, above all, generous example. "Rebuild to repair" is a crowdfunding project born in 2016 following a disastrous earthquake in central Italy. By accessing the portal, which is still active, it is possible to donate between 50 and 400 euros to help all families who have lost their home or job. The project was launched by the Piedmont Region, and it was a real success.
  • Ginkgo umbrella. Among the Italian crowdfunding stories, that of three engineers from Bologna has definitely made the rounds on the web. These guys have designed the first eco-sustainable umbrella in history, in order to create a tool for semi-daily use that is made with low-waste materials and minimal environmental impact. The project was launched in 2015 on the platform indie gogo and collected the pre-set budget in a very short time: 137 euros for the launch of the product.
  • Drop 99. Drop 99 is a 2017 project dedicated to purification and environmental sustainability. It is a low-cost portable filter that blocks 99,99999% of bacteria from polluted water, designed to allow access to clean water for developing populations . The crowdfunding campaign was launched on an international platform, Ulule, and raised almost 75 million euros.
  • Sails of glory. A beautiful board game designed by two Italian guys and published in 2013 by Ares Games. The boardgame combines the passion for miniatures with that for card and board games. The crowdfunding campaign, launched on kickstarter, raised $276, becoming one of the most funded projects ever on the American platform.

Other international examples of crowdfunding

Now that we've told you about some Italian excellence, it's time to dream big. Here are some examples of very successful "international collections".

  • Neil Young raises $6,2 million on Kickstarter for its Pono Player, the high-quality music player. The legendary musician surpassed his target of $ 800 in less than 24 hours already in 2014, and by the end he achieved a real record for the times that were. The goal is to create an instrument that would revolutionize listening to music once and for all.
  • Pebble raises $4,7 million after one month for the creation of the smartwatch of the same name. We are talking about a wristwatch computer pioneer on the market at the time, and now so widespread in all its variants.
  • Restoration of the Casa Romana del Santo. A $125 Kickstarter for the restoration of the Roman home of San Francesco. The digital collection exceeded expectations and reached 130, giving new life to the structure also thanks to the promotion of exceptional testimonials such as Franco Zeffirelli and Liliana Cavani.

Films, restorations, technological and innovative objects, board games, social activities: whatever the project, there is crowdfunding that can help you make it a reality. Just follow the 10 basic rules of excellent crowdfunding.

The 10 steps of excellent crowdfunding

  • Create a community through a landing page and social media.

You can do it now and there's no reason to wait. Before you even get to work on the other points on the list, you can launch a pre-launch page on platforms like Thunderclap or LaunchRock. These two services allow you to quickly create a page to announce your crowdfunding project, inviting people to join your mailing list or share the launch times of your campaign. This pre-campaign runs from 60 to 90 days and, based on feedback and subscriptions, it allows you to evaluate the feasibility of the actual launch.

Before signing up for any crowdfunding platform, you will be asked if you want to launch it as an individual, company, public body or association. Your account will usually be set up accordingly, prompting you for specific information. You will also need to link your bank account to receive the funds and upload relevant documents proving the identity of the person or the validity of the company.

When someone donates a contribution to your CF, you are making an agreement with him and you are committing to him - even legally - to present the project and implement it, to use the funds received ONLY for the purpose of producing that project and sending it to the recipient in the set times. Some projects are managed by different modalities. For example we remember “All or nothing”. In the event that you do not reach the established amount, you will undertake to reimburse all investors. There is also the "Keep it all", i.e. in the case in which you can guarantee the realization of the project even without the entire budget. In both cases, the collection will continue until the end of the available days and may even collect more than 100%.

At present, funding is classified as donations and rewards may include VAT. Don't be afraid to contact an accountant to find out in detail the legal and tax aspects of any crowdfunding. For example, you may run into the opportunity to get tax breaks for donors.

You can't launch your CF if you don't know the platform with which you will do it. Whether it's DeRev or Kickstarter, or any other tool, you'll need to know it like the back of your hand. Understanding fundraising methods and learning how to follow user behavior helps you effectively promote your strategy.

  • Also build and publish a mini website ensuring you have a valid domain name

Now that you have a platform and a pre-launch in hand, you need a mini site that talks about you and what you have in mind for your microfinance project. Create a microsite that contains all the information necessary to give structure and nuances to the product it is essential to capture the user's attention and convince him that your idea is a winner, and it is worth the trust you can give him. Domain name and validity of the same are to be verified in collaboration with a professional.

  • Define a brand and protect it

La branding reputation is a neologism coined by marketing experts to talk about everything related to the credibility and authority of a business in the eyes of the public. Branding reputation is built through management of social pages, publishing content on a blog (also of platform) and the relaunch of the news on industry forums, in order to spread the project widely.

  • Build a strategy with planned activities and donations

Among the most important and determining factors for the success of a crowdfunding are all the strategies with which you want to promote it - naturally. A strategic and effective plan takes into account all previous evaluations to define the general line on which all subsequent points will be built, from content to promotion.

When you have established the primary target of the campaign, you need to identify groups of potentially affected users to finance the project, i.e. supporters or those who want to buy what you have to offer. It is therefore necessary to plan actions aimed at reaching the niche of the public in question, which are not the same for all sectors.

Comes into play here a calendar of activities aimed at creating the campaign, from press releases to social media posts, blog posts, events, campaigns, partnerships and milestone rewards.

A good idea is to create a forecast graph of the estimated trend of donations.

  • Define the economic goal to be achieved

Defining the economic objective of a CF campaign is not easy at all. Every project, every team, and every situation is unique, and there is no one-size-fits-all formula. There are only industry experts who can guide you in making one concrete plan based on the following points:

  • Campaign preparation cost (including videos, graphics and content);
  • Cost of producing and shipping rewards;
  • Legal, tax and crowdfunding expert advice;
  • Press office, social media, events and public relations;
  • CF platform fees and royalties;
  • Adv campaign for online and offline advertising;
  • About a 20% buffer for unexpected expenses.

Keep in mind that only 2% of crowdfunding campaigns in the world raise more than 100 euros. A more ambitious goal could therefore scare many users, who will directly avoid subscribing to the project with an investment. Many successful campaigns reach their budget goal in less than a third of the total CF time. The remaining time is used to raise even more funds with what are defined as "stretch goals" and offer the opportunity to add features to an already well-defined and reassuring project for investors. In short: riding the media wave at the start of the campaign is vital for its success.

  • Tell a story

Once upon a time there was a king sitting on the sofa. All kidding aside, people have no interest in donating hard-earned money if they don't believe that your project or initiative can somehow give them a benefit of some kind. Or maybe improve their quality of life. In this sense, it is necessary to generate one captivating and seductive story that will captivate the user, leaving him thinking that his life will change forever if this product were to become a reality. This is the basis that will inspire the creation of all the content and materials you will need to prepare for your campaign, whether they are videos or descriptions.

Don't get lost in strange and complex stories: get straight to the point, be clear and transparent and have an honest goal of tell your story in points, explaining all the peculiarities and specific results what do you want to get. Another step to gain customer trust is to explain in detail (as much as possible, of course) how you will use the funds raised, even those that exceed 100% of the funding.

Furthermore, What do you have to offer your supporter users in return? For each donation fee, high or low, you should expect a reward system ranging from the simple participation card (for small amounts, such as 1 dollar), up to the product itself with deluxe gadgets.

Yes within everyone's reach, usable and pleasant, and don't be afraid to rely on an expert to add images, infographics and technical specifications capable of showing the most savvy user in your sector what your product can do for them.

  • Make an effective presentation video

The video (or videos) of a CF campaign are without a doubt one of the most important tools to quickly show your product to any potential backer. 30 seconds are enough to create interest: if you are successful, the user will continue reading the page and carefully evaluate whether to finance your project. Data in hand: almost all campaigns that do not have a video presentation fail without exceeding 20% ​​of the required fund.

You don't need a thousand thousand euros to finance an extraordinary video. You don't need “Avatar” animations, nor Angelina Jolie as a testimonial. You have to tell what you have and what you can do in an enthusiastic and exciting way, involving people to invite them to participate in your funding.

Most people will give you 10 seconds of time to understand if he wants to continue watching the video or not. Many skip the introduction. Others, on the other hand, let themselves be seduced from the very first details. At the end of the video, don't forget the CTA inviting people to join your campaign.

  • Goal and stretch goals – the rewards

Now that you've potentially hooked the user, it's time to predict a number of rewards which serve the user to definitively convince him to subscribe to you. Rewards are based on the donation amount. Usually, those who ask for donations of 5-10 euros don't have any, while those who ask for 50 to 100 euros (and more) expect to send something to the donor. Sometimes it is the product plus exclusive promotional gadgets.

Statistically, the most successful CF campaigns feature at least 8 rewards, some of which are weighted for individual taxpayers, and others for donors such as companies, partners and associations.

Let's think of symbolic rewards, such as participation cards, product rewards, extras or rewards for large donors, which include partnerships, sponsors, logos and mentions in the project or dinners with developers.

  • Plan the media, PR and press campaign

After all, you can't launch a crowdfunding campaign without it harness the driving power of social media. Followers are nice and cute, but know that if the community doesn't really believe in what you're doing, you may be getting funding from less than 1% of your fanbase. You have to reach them, convince them and retain them with Facebook, Twitter or Instagram, and a sustained strategy over time can lead you to success that you never hoped for in the phases following the launch. Plan an email marketing and press release operation to let operators know that you are about to enter the field in style.

Media, journalists and bloggers play a major role in this stage, and it is important to realize that it's not enough to open a Kickstart to magically achieve the desired success. If you want to get results, you have to invest: the most funded campaigns in the world are the most successful ones. Advertising must be online and offline and promote the project in such a way that it can reach the public where they least expect it.

  • Make sure you get to at least 30% of the objectives in the shortest time possible.

Last but not least, the main goal is to obtain at least the first 30% of the budget in the shortest possible time. If you want to go viral then you need to be quick and get secure lenders support asap. The people who finance the campaign are defined as trendfollowers, therefore NOBODY wants to be the first in a campaign stopped at zero. Is it going to be a bad scam? I don't trust it. Better wait.

And so everyone waits and no one subscribes. And we are all happier. Trust someone who really believes in your project and start the donations yourself. It will be easier to get credibility in the eyes of users. Basically, if you want to start a campaign, you should make sure that at least the first 30% is covered almost immediately, so as to convince less hooked supporters to contribute in turn to what looks like a project that will go through.

Are you intent on start a crowdfunding project for your business? Turn to Innovating to get complete advice on everything you need to know to start one tailored to your dream. Together, we can do great things!