If you are on Facebook, you’ve probably seen a number of posts or ideas promoting crowdfunded initiatives cross your feed. Betabrand, Kickstarter, GoFundMe, and many other platforms provide an opportunity for creative ideas and programs to directly appeal to the public for financial support, rather than attempting to secure backing from a bank or venture capital. In exchange, those who jump in at the beginning to provide the necessary capital are rewarded with discounts and the first opportunity to own the product being launched (if the funding is for a product rather than fundraising for a charity or event).
How do these ideas secure the support they need?
Initially, the novelty of an idea or project was enough to provide the viral “boost” to secure funding. But as the number of ideas and platforms to promote them quickly grew, it was no longer enough to have a cool idea or an important cause to promote—these ideas also needed to self-promote in a sustained way to keep funds flowing in.
In this sense, a crowdfunding initiative is no different than any other product: it needs PR and communications support to maintain the visibility necessary in order to succeed.
Crowdfunding, in a nutshell
It’s worth taking a quick step back to look at how crowdfunding works, and why it has become such a popular vehicle for getting ideas into the marketplace. At its most basic level, a crowdfunded venture is taking a business plan directly to the community that will potentially buy the product and having them finance the early stages of development by aggregating small dollar contributions. Ideas have run the gamut from high-tech coolers to clothing to a beehive that dispenses honey. A successful crowdfunded product or venture can then go on to secure additional funding from more traditional channels to bring the idea or product to market. It works well on a couple of levels—aggregating smaller investments disperses risk across a wider pool, and that wider pool provides a certain amount of evidence that an idea has potential market support, which translates to a higher level of confidence from traditional investors and funding sources.
In some ways, a crowdfunded effort is similar to fundraising in the political or nonprofit sectors. The audience of potential customers is going to be much larger than the audience of potential investors, so if people contribute to an idea at a low dollar amount—say, $5 or $10—depending on the target fundraising goal, a successful effort will need donors to contribute more than once while also continuing to broaden its donor base. A crowdfunded effort does this by establishing rewards and bonuses—a free shirt for referring friends, for example.
It is this stage of the effort that benefits most by having a communications strategy behind it, because it’s difficult to maintain momentum and excitement. There are two main audiences that a crowdfunded effort needs to establish communications with: its stakeholders—those who have kicked in the initial funding—and media.
Communication with the stakeholders is vital. These are not just the crowdfunded venture’s first investors, they are also its brand ambassadors and early adopters. They are the word of mouth engine that will keep the program moving forward by reaching new people, getting them excited about the idea, and growing. Don’t take them for granted, and don’t leave them hanging. They are a VIP group; treat them as such.
For media outreach, a crowdfunded program doesn’t need to score a piece in the New York Times or Wall Street Journal—although that would be nice. The same rules apply to PR and media outreach for crowdfunded ventures as they do for any other product or initiative. Make sure your pitch is relevant to the outlet you are pitching, the story or idea has to be interesting (and will do better if financial support is already part of the groundswell of interest), and don’t cold-pitch reporters by sending an unsolicited press release. An idea that matches the audience of a popular blog might generate substantial interest, but again the media relations rules are the same—try and build relationships with reporters and bloggers within the sector before pitching to them.
Crowdfunding has been wildly successful in some cases, less so in others. But the concepts are the same as the traditional marketing around a product—support lags when people’s attention moves to other things. A well thought-through communications strategy should be incorporated into most crowdfunding efforts.