It’s not just the offering that determines the success of a crowdfunding campaign. A solid marketing strategy is necessary to effectively promote your business and build a following.
Digital marketing is here to stay
Even before the pandemic, our lives were increasingly migrating online. Now, the need to establish a digital presence is even more crucial, because the stakes are even higher. While the future is online, the venture capital community is ill-prepared for this sudden development. VC’s typically rely on in-person events and meetings, whereas crowdfunding is completely online, making it more practical, accessible and scalable. Crowdfunding’s strong digital presence is a competitive advantage for startups because it’s direct communication with consumers and potential investors, that’s substantially cheaper and faster than raising money through typical VC channels. Plus, marketing can be more easily rolled out and amplified online through social media to reach a much wider audience than impractical offline channels.
Tell me a story
Building a superior product or service isn’t the only factor necessary for success. Remember the Microsoft Zune vs Apple iPod showdown of the 2000s? Zune was clearly the superior piece of technology, but Microsoft couldn’t compete with Apple’s marketing approach. Apple’s marketing machine knew what their consumers wanted before they did and were able to appeal directly to that sense.
The beauty of digital marketing is that all companies have the opportunity to share their unique story in a strategic and meaningful way that resonates with their core consumers. As crowdfunding campaigns are rolled out online, entrepreneurs are able to tweak their messaging and positioning in real time, as well as gather valuable consumer insights. This is a far cry from the customary Guy Kawasaki 6-slide presentation to venture capitalists that lasts only a few minutes and consequently fails to capture the soul of the company and those who they’re serving. Crowdfunding marketing allows entrepreneurs to strategically position their company and messaging for customer success, instead of getting one shot with a VC who may not even look up from their phone while entrepreneurs are presenting.
Find your tribe
Building an audience of excited consumers and potential investors requires knowing your story and being able to effectively communicate it to the audience who will care the most. This requires a deep understanding of the target market’s needs, motivations and pain points, in order to successfully predict their reactions. Not surprisingly, social media has been a powerful secret weapon with regards to marketing crowdfunding campaigns and connecting them with their intended audiences. The reach online is staggering compared to taking one Hail Mary sniper shot at the VC community.
Before the internet, only local investors would hear about a product or service, but in today’s globalized online world, the market for potential investors is worldwide. Entrepreneurs are no longer constrained by geography or certain investor profiles, thanks to crowdfunding. Considering how the coronavirus has pushed VCs to the sidelines of raising money, persuasive marketing campaigns have the capacity to leapfrog the modern crowdfunding industry over antiquated venture capital as a means to raising money.