Kickstarter For Advertising and Funding
January 6th, 2014 by
Crowdfunding has been around for a while now, from major sites like Kickstarter to more niche spots, like Indiegogo. Crowd funding is a process in which a project finds its funding from a vast pool of minor investors as opposed to the traditional approach of loans, private partners, and venture capitalists. Proper utilization of this funding option has lead to product launches across a variety of fields, from independent films to music to video games.
Recently, major artists and established companies have turned to crowdfunding to act as both an additional revenue stream as well as viral marketing. By allowing fans and potential customers to feel included in the creative process, you can increase loyalty to the brand and to the project itself. Most projects have rewards associated with different levels of fund contribution, from early copies of products to names appearing in the credits of films and albums.
Small businesses can even capitalize on this process by starting projects to fund future store or service expansions, and future product lines. A great example of a potential user would be a clothing boutique that sells a mixture a vintage clothing and modern, locally sourced products. The boutique could start a crowdfunding project to expand the production of an in-house jewelry line, setting a funding goal of slightly higher than the cost of an item. This essentially results in pre sales of these items, as well as viral advertising amongst current and potential customers.
Avoid potential pitfalls, the major one being over promising. Make sure you understand the entire cost and potential extra expense associated with any new line or expansion and set your funding goal for above that amount. This way you will have all the capital you need to deliver the final product to your numerous investor/customers. And if you don’t meet your fundraising goal, sites like Kickstarter refund the money to the investors so you don’t have any unmet obligations among your existing customers.