One of the first questions asked by crowdfunding novices who inquire about our crowdfunding advertising services is – “What is your success rate?”
We quickly give the same answer we give a dozen or more times a week as we do our best to hide our exasperation “When it comes to crowdfunding promotion – or promotion of absolutely anything at all – success rates can’t be calculated. In the advertising world this is a useless statistic….” as we go on to explain that advertising success rates, even if they could be calculated through some miracle of modern day computing power, would be meaningless since any and all such mathematical calculations can’t account for the human factor – Why do people buy?
Here’s a better question the serious entrepreneur should be asking “What happens after people buy from us? How do we get them to buy again?”
A recent crowdfunding article in the Wall Street Journal explores this in exquisite detail.
The article started out, as most do, pointing out the 38% crowdfunding failure rate as reported by Kickstarter. Then something different happened – the article took a sharp turn to explore crowdfunders who have succeeded in hitting their crowdfunding goal and then came back for a second shot to raise money via crowdfunding again. Sometimes even more money. Sometimes much, much more money.
While the piece didn’t attempt to steer away from the fact that many more crowdfunding campaigns fail than succeed, they actually embraced this as a good thing…”Every single time you launch a product, there’s risk — nothing’s guaranteed in this world,” said Eric Migicovsky, founder of the Pebble smartwatch. “That’s the reason why we went back to Kickstarter, to get feedback and validation early on.”
They got crowdfunding validation alright. Their second Kickstarter raised $20 million; twice as much as their first.
The article goes on to talk about several crowdfunders in the worlds of music, tech, AV and other realms that successfully raise money time and time again. Part of their secret to crowdfunding success lies in repeat funders – those backers who are drawn to the second Kickstarter, the third and the fourth based on their being a fan, follower and backer of previous crowdfunding projects.
As to those who can’t claim crowdfunding success the first time – you should try again today. A first time effort in running a crowdfunding campaign is always a learning experience. Experience being the best teacher, a second crowdfunding campaign can help you hit your goal the next time around by learning from your mistakes and, perhaps, making a few necessary course corrections such as:
1) Extensive crowdfunding promotion. An all-out effort should be made to advertise a crowdfunding project. Don’t rely on your friends, your 10,000 Twitter followers, 50,000 Facebook fans or 100,000 subscribers to your email list to do all the work for you. Issue crowdfunding press releases, let others spread the word for you on social media and let your existing crowdfunding fans work for you by running referral contests. You need to get the word out in every way possible.
2) Lower your funding goal. Those Kickstarter stats everyone studies tell us that higher crowdfunding success rates occur when the crowdfunding goal is lower. Make a strict crowdfunding budget; what is your absolute bottom-line number to deliver on your crowdfunding goal? Make that your crowdfunding goal and offer stretch goals if you’d like to raise more.
3) Update Early. Update Often. Keep your campaign fresh with regular updates. What’s going on? What’s happening? Crowdfunders will share news that reached 20% of their goal on the first day, added an exciting new perk or got a celebrity to sign on and endorse them.
If you succeed in crowdfunding the first time – by all means do it again! You can continue growing your customer base or audience as you continue developing and selling new products.
If you didn’t hit your mark the first time – definitely do it again. The more practice you get at something the better you get at it. You can be the next serial entrepreneur with a string of successful crowdfunding campaigns.