Crowdfunding success depends on a number of factors, one of which is social marketing. So how do you choose the right social network(s) for your fundraising campaigns?
Hence, before you kickstart your next fundraiser, there are important things to note about social network adoption and how to use social media promotion to achieve crowdfunding success.
Perhaps you ask:
According to Peter Cohan, out of every 1,000 startups that meet with a Venture Capitalist only 2 get funding.
With Crowdfunding on the other hand, the crowd, made up of several investors or backers contribute to causes or companies, thus disrupting startup founding and funding.
How Successful is Crowdfunding?
Crowdfunding has helped found businesses and fight causes from startups to charities.
Last year J.J Watt Harvey Relief Fund on YouCaring set out to raise $200,000 for Hurricane Harvey victims.
It turned out to be a $37m success story, thanks to over 200,000 donors.
The following are some other successful crowdfunded initiatives.
FUNDS RAISED ($USD)
|1||Pebble Time (Smartwatch)|
20, 338, 986
|2||Coolest Cooler (Probably cooler than yours)|
13, 285, 226
12, 779, 843
|4||Kingdom Death: Monster 1.5|
12, 393, 139
|5||Flow Hive (Honey directly from beehive)|
12, 212, 833
|6||Pebble (E-Paper watch for Android and iPhone)|
10, 266, 845
|7||Baubax (Travel jacket with cool features)|
9, 192, 055
8, 782, 571
|9||OUYA Game Console|
8, 596, 474
|10||Everyday Backpack, Tote and Sling|
6, 565, 782
|11||Fidget Cube (Vinyl desk toy)|
6, 465, 690
6, 333, 295
6, 225, 354
|14||Sondors Electric Bike|
5, 832, 467
|15||Bring Back MYSTERY SCIENCE THEATER 3000|
5, 764, 229
|16||The Veronica Mars Movie Project|
5, 702, 153
|17||Bring Reading Rainbow Back for Every Child,|
5, 408, 916
|18||ZeTime (smartwatch with hands over touchscreen)|
5, 333, 792
|19||Restore King Chapel Now. Every Day and Dollar|
5, 048, 213
|20||An Hour of Code for Every Student|
5, 022, 911
171, 550, 774
Source: Crowdfunding Blog
These 20 projects on Kickstarter and Indiegogo alone raised a total of $171, 550, 774.
Yours could be next, but you’re likely wondering
How Do I Start My Crowdfunding Campaign?
Begin with an idea and a business plan. The following sequence shows you how to start a crowdfunding campaign in 10 steps.
First, know the rules guiding your desired platform. Very important.
Next, you’ll need:
- An Idea
- Businesses Plan
- Co-Founder (where applicable)
- Prototype (where necessary)
- Backers Directory (or BackersKit)
- To Be Active on Social Media and Grow Your Network
- To Sign Up on Platforms like Kickstarter or Indiegogo and Be Active Contributing Funds and Quality Ideas to Discussions around Live Campaigns
- A Good Copywriter (or become one)
- A Good Video Creator (or become one)
- An Optimized Landing Page
For reward-based campaigns, decide backers reward and perk levels in advance.
At this point, the next big question becomes, so
How Do I Market My Crowdfunding Campaign?
Publicity is a key determinant of crowdfunding success and there are several ways to create awareness about crowdfunding campaigns. These include:
- campaign copy (pitch)
- video pitch
- word of mouth
- branded t-shirts/other wearables
- mobile advertising
- push notifications
- email newsletters
- guest posting/blogging
- social media
Hire expert copywriters if your persuasive writing skills aren’t up to par since much of the publicity involves written content.
Assuming you’re looking to start an ecommerce business, here are key things to consider before going public with your fundraising campaign.
Key Things to Consider Before Seeking Funds
1. Average Age of Active Social Media Users
Millennials are one group of shoppers to keep an eye on.
There are over 80 million of them in the US, and this group spends over $600 billion annually. This millennial spend is 28% of total daily per-person consumer spending and is expected to reach 35% by 2030.
Additionally, 90% of Instagram users are mostly younger than 35.
If your ecommerce startup or campaign targets millennials, data like this can even influence the design of your product or concept and make it more appealing to millennial backers.
AOV is the average basket size of each online shopping transaction. US shoppers spent an average of $82.5 per online purchase in Q1, 2017.
Reports indicate that nearly 67% of all social media visits to Shopify stores come from Facebook. Additionally, 85% of all ecommerce orders from social media come from Facebook which has average AOV of $55.00.
With this information, you can target your crowdfunding Facebook Ads to the right audience with the right spending power. These can become both backers and buyers.
Engagement and conversion are close cousins. Knowing how engaged and how social media users engage on different networks can give great insight and boost your crowdfunding efforts.
comScore conducted a study in the UK about social engagement. Here’s what they found out:
Average time spent on social sites per month was 800 minutes for Facebook as of July 2016. Second-placed Snapchat was less than 400 minutes.
The more engaged an audience is, the more they’re able to spot and spread the word about your crowdfunding campaign.
By far one of the most important e-commerce metrics. Conversion rate is the percentage of visitors/traffic who carry out a particular requested action, e.g., who actually make a purchase, sign-up for your newsletter or share your campaign on their social media accounts.
Facebook has the highest ecommerce conversion rate at 1.85% with YouTube scoring 1.16%.
Knowing social network conversion rates in advance can guide your crowdfunding campaign publicity.
Which brings us back to one of the most vital aspects of crowdfunding marketing, social media.
Crowdfunding And Social Media Networks
In a recent study by Crowdfund Capital Advisors, they investigated the use and impact of Facebook, Twitter, Instagram, and LinkedIn on 233 crowdfunding campaigns. 120 of these campaigns reached their Minimum Funding Target, or MFT, while 113 did not.
You need to check it out.
Following are key highlights of that report:
- For apparel, wine, and spirits, the size and engagement of their social following is a significant factor in their crowdfunding success
- Size of social following is more a success factor in California than Texas, two of crowdfunding’s biggest states
- The top 20 campaigns, or those who raised over $500k, clearly had more social following
- The top 20 CEOs had a wider professional network, with an average of at least 414 LinkedIn connections
Note, however, that Project A succeeded with Snapchat is no guarantee that Project B will be a Snapchat success. Hence, adopting a cookie-cutter approach to social network selection may not cut it for your next campaign.
10 Factors to Consider Before Choosing Social Network(s) for Crowdfunding Campaigns
The right network for you may depend on a number of factors like
- marketing budget
- processing fees
- news feeds algorithms
Here we go:
For apparel, wine and spirits, size and engagement of social following are key factors for crowdfunding success.
You can grow your networks by
- following or connecting with more relevant people/accounts
- posting high quality content or comments
- incorporating the right hashtags for wider visibility
- using @mentions appropriately
If you’re in the luxury industry, quality might count over quantity. 100 high networth backers on LinkedIn, for instance may outfund 10,000 Facebook fans.
They say your net worth is dependent on your network.
California and Texas are big crowdfunding states, size of social following is more a success factor if you live in or around California.
In that case, make a list of successful crowdfunded projects around your location, observe how they employed social media, which networks they chose, nature and frequency of their posts.
In addition online Backer Clubs like BackerClub.Co are made up of influential serial backers known to have backed several thousand projects on Kickstarter and Indiegogo.
Sign up and create a spreadsheet of which social networks these serial backers use often. Follow them on such networks.
Which social networks have your competitors successfully used to crowdfund their startups or projects?
How did they engage their audience on social media, causing them to donate?
Your competitors can oftentimes point you in the right direction as to what works and what doesn’t.
Same goes for crowdfunding. Learning how they run their social media campaigns can give you great insight when planning or executing yours.
4. Marketing Budget
You must not have a high social marketing budget but it is essential to have a budget in place. In addition to earned media, paid media can increase your chances of being noticed.
Facebook Ads allow you run ads for just about any budget, of course the more the better for well targeted ads.
Salesforce Social Marketing plans for instance, start at $1,000/mo for 2 social accounts featuring 20k monthly mentions, social listening with 1b sources etc.
5. Processing Fees
It is important to figure out if there are processing fees for donations on the social network you choose. You need to know how much it is for the donor and donee as the case may be as well as for different card types.
High card charges may discourage some donors. On the other hand if charges to you is high it may deplete your funds and affect your ability to fulfil promised perks.
According to Facebook, “for donations made to personal cause fundraisers in the United States, 6.9% + $.30 of the donation goes to payment processing fees, fundraiser vetting and fraud prevention.” For those in Canada this figure is $8.8 +$.30.
Below is a breakdown of social networks ranked by number of active users (numbers in millions).
Source of Data: Statista
Facebook leads with over 500 million more active users than its nearest neighbor YouTube.
But while Facebook has more global reach, smaller platforms may have a more targeted audience for your kind of business. For instance, LinkedIn may have more backers/angel investors than bigger Facebook.
More than the numbers, relevance counts. It’s not just the population but population of potential sponsors or advocates.
How wide is the reach of your preferred network? For instance Facebook is banned in China so you can’t expect to use Facebook to raise funds from Chinese donors resident in China.
Similarly, WeChat is big in China with over 963 million users, mostly concentrated in China, which limits its global reach for crowdfunders seeking global support or awareness for their startup or project.
A wider reach is a wider net, increasing your chances of awareness and potential donations.
8. News Feeds Algorithms
How does your preferred social network serve its news feeds?
Does it give preference to social over business related content?
How often does it recycle published or promoted content?
Can users adjust the settings if you request them to, to better boost your crowdfunding publicity efforts?
Do their news feeds algorithms change too often for comfort?
These are key questions to ponder.
Does your network of choice have a track record of aiding crowdfunding success?
How many crowdfunded successes or failures are directly attributable to such networks?
Platforms like Kickstarter, Indiegogo and YouCaring have a long list of successfully funded projects as seen in the list of 20 cited above.
Can the same be said of your choice social network(s)?
Analytics help you measure results and effectiveness of your social marketing efforts, ensuring you maximize every dollar or time spent creating awareness for your campaign.
Tools like Google Analytics can give actionable insights into how audiences interact with your posts on social media so you can do more of what works and less of what doesn’t plus know which networks perform better for you.
Facebook Insights also give in depth insight into how your audience interact and engage with your posts.
The same with other networks. Figure out which network offers the best user experience and interface for your crowdfunding reports.
Implementing these will help you properly position your publicity or prospecting efforts for maximum impact.
Social media can make or break your crowdfunding campaign. Knowing which channels to adopt can significantly help you reach or exceed your MFT.