On the surface crowdfunding appears to simply be a social media marketing mechanism that integrates a potential online community with an accounting function. Closer examination of a crowdfunding campaign shows a unique marketing opportunity that requires business owners to promote their companies, using social media, to new audiences.
This organized promotion increases the campaign’s overall visibility and social engagement while motivating their existing networks to support and promote the campaign.
Crowdfunding is a revolutionary way to get your business or project funded. It is a Web 2.0 technology driven mechanism to democratize investments but, if you stop there you are only getting an infinitesimal amount of the value Crowdfunding encompasses.
A Marketing Tool
Crowdfunding is a unique and innovative marketing tool that provides research, promotion and engagement, which are essential for any business and crowdfunding provides access to promote and engage with customers, users, and community members in an unreserved relationship.
Crowdfunding, as a marketing tool, is invaluable to any brand as a way to create social media driven communities that link their current customers, new customers, new product launches, product development, product testing, customer service, while increasing brand reach, and brand awareness.
The Crowd is Fertile Ground for Market Research
- Crowdfunding forces you to engage users and customers before your products are ready to sell on the market
- Crowdfunding forces you to engage with your crowd that helps create market demand for your product
- Crowdfunding provides market validation and proof of concept, which allow companies to save time and money in market research they receive directly from the crowd
- A successful Crowdfunding campaign will help companies significantly promote the selling of their product because they now have a community of brand advocates
The Hidden Benefits of Crowdfunding
So whether you are crowdfunding for equity or rewards, there are a plethora of advantages in using the crowd. Even for campaigns that do not achieve their goals, you will still walk away with something of value, whether that is experience, market data, or a renewed ambition. Don’t misunderstand the point I am trying to drive home, please focus on raising the money after all crowdfunding is still in essence building a “crowd” to receive “funding”.
The main point of this post is it’s important not to lose sight of what supporters have to offer besides their cash. I call them the hidden benefits of crowdfunding and if you work your campaign effectively, you will benefit in a number of other ways, all vital to help you grow your business in the future.
The Hidden Benefits of Crowdfunding:
1. Market Research
2. Market Validation
3. Proof of Concept
4. Build an engaged community of customers
5. Build brand advocate that spread the word about your brand
6. Product development feedback
7. Testimonials and case studies
8. Pre- Orders for your product and service
This post was provided by Bill Huston, make sure you see more of ‘My Crowd Rocks‘ and read their excellent blog posts here. My Crowd Rocks is a US based crowdfunding firm that have worked getting pitches fully funded before the birth of crowdfunding in the UK!
By Bill Huston , Dave Farmer