Crowdfunding as a brand building strategy
It is no secret that crowdfunding is a great alternative to traditional capital to raise funds. But often people use it as a short term tactic. To realise our dream of a game, book, line of bags or a unique coffee machine. Instead of seeing it as a way to raise funds once, consider it a long term strategy to build your brand.
Why?
Traditional investment doesn’t come with customers; crowdfunding does. And they will be more loyal than customers acquired through regular marketing.
If you fund your company through traditional investment, your investor does not contribute to you growing your customer base. Instead, you will spend a considerable portion of that investment in finding customers and creating ways you can build relationships with them.
When you crowd fund (to a consumer market), you immediately build relationships with clients while raising funds: a double whammy. Of course setting up and running a campaign is not without marketing costs, but there is evidence that suggests that the ROI of crowdfunding is better than of regular marketing.
People who are ‘founding backers’ of your campaign can become brand ambassadors for the long term: they will be more interested and loyal to you than customers acquired through conventional marketing.
And the larger your customer base and proof of traction, the easier it will be to attract traditional investment if you might need it.
Who does it well?
Take for instance Sugru, the mouldable glue. Sugru has returned time and time again to their supporters base for financial support. It recently raised 3.3 million pounds through Crowdcube, its third successful crowdfunding effort, almost 2 million pounds more than their 1.5 million ask. The crowdfunding plays an important role in the story of the brand. The people that use and back their products are regularly put in the spotlight as the heroes of the brand in a genuine way.
How to make it work long term
Use your campaign to learn about how clear your offer is, what message of value is effective, which channels work and to get a better understanding of your audiences. These lessons will build a foundation for your brand and marketing long term.
Use your crowdfunded origins as a part of your brand story so it creates a legacy long after the campaign is over.
Backers will only become ambassadors if you engage them regularly beyond the campaign and treat their money, time and efforts with care and respect.
Build the research and development culture acquired during campaign into your entire organisation. With any challenge, question or hick-up, asking how the crowd can help can build powerful relationships between people inside and outside your organisation.
Our own crowdfunding story
If you are crowdfunding, good luck with your campaign. We shared some of our lessons from our own successful campaign last year.