You’ve probably noticed by now that rewards-based crowdfunding is a great way for new businesses or projects to take off.
What you may not realise is that crowdfunding is being used by established businesses. In fact, its being increasingly embraced by existing businesses in some pretty creative and resourceful ways.
A player like Sony doesn’t need to raise money via crowdfunding. Yet, they’ve launched numerous crowdfunding campaigns, finding the exercise so powerful they even launching their own crowdfunding portal.
For Sony, crowdfunding adds marketing value, reducing risk associated with moving to full production after minimal marketing feedback, and is an excellent co-creation tool.
While most businesses are in a different league than Sony, there are plenty of valid and exciting reasons why many existing businesses can consider crowdfunding.
How Your Businesses Can Use Crowdfunding:
FINE TUNE YOUR PITCH
Some argue that ‘crowdfunding as financing’ is actually a side note to ‘crowdfunding as marketing’. Crowdfunding forces you to fine tune your pitch and marketing messaging, engaging your audience with a great effective story. An effective crowdfunding campaign is essentially an exercise in market messaging and product viability, forcing companies to think about how a product should be sold.
It’s not just about raising funds….its about also getting FEEDBACK. Crowdfunding campaigns can turn into an awesome crowd-involved projects or co-creation tool where you use the crowd’s input to create new features and improve the product. One of the top benefits is connecting directly with prospective customers and your existing customers about a particular product or service. Customers have a vested interest in your success and can give you access to a network of marketers, mentors and potential customers who can be willing to offer their support AND expertise as beta-testers.
BUILD BRAND ADVOCATES
Feedback is one thing, advocacy is another. Your customer, via crowdfunding, has a reason to play a part in your story. By inviting them onstage, they don’t have to just sit in the audience. Those that accept your invite are your ‘early adopters’ and potential brand advocates. They are willing to stake their money on your business’s long term success with a their belief in your story and product or service.
Early adopters are much more likely to recommend your product or business to a friend or family and share across social media. By keeping your backers engaged and inspired via regular updates, offering incentives and sneak previews, for example, you can see awesome levels of engagement from these backers.
Crowdfunding doubles as marketing AND media exposure. Every viewer of your campaign equates to a potential new customers. Your campaign remains visible on most crowdfunding platforms, regardless if its successful. It allows you to have a new focus on social media or a blog, that differentiates you from competitors. It can also can invite potential partners and investors via the exposure. Crowdfunding can also be great validator as it gains exposure outside your geographical comfort zone.
INTEREST FREE FUNDING
It’s an excellent option for a business looking to expand or when traditional lenders say ‘No’. Crowdfunding allows allows interest-free funding without banks or red tape. Companies can use crowdfunding to launch new products by pre-sales of their goods and products.
Full creative control, with limited risk and no money-strings attached due to to investor interest.
Crowdfunding can be a way to align with other businesses or organisations that amplify your brand or company values. For instance, align your new product with a social charity via a crowdfunding campaign to offer unique rewards. Importantly, demonstrate your commitment to help your community. Or join with a complimentary business to create unique experiences as rewards, using combined power to raise funding and leverage off each others existing fanbases.
As you can see, the reasons for existing businesses or startups are compelling and offer interesting possibilities and value.
The important thing to remember is that regardless of the crowdfunding platform you choose, the results you get are proportional to the effort and attention you put into your campaign. You will want to tie this into your own funding efforts both on and offline. It’s much like any new marketing campaign you might engage in as business.
If you are a business owner, here’s a chance to take advantage of a new channel. Whether it be to build more excitement in the coming new year…find a new target customer base…or a go-to market pathway, the opportunity is there.