Crowdfunding Marketing It has never been easy to get someone to bet on you without knowing you, and crowdfunding, despite being the most advanced method to get funding for your project, is still complicated. I consider it complicated because we are not talking about machines that calculate the risk of an investment and decide that, if they reach a certain percentage, they accept or reject it. In crowdfunding, you deal with people, and as such, not everything is statistics and numbers, there are human factors, there are risks, trust, treatment, etc. For this reason, from our eCommerce Management and Web Analytics service, I am going to comment on several help tactics that I read in a ConversionXL article that will help you to more successfully fund your project through crowdfunding. 1. Reduce the perceived risks Crowdfunding is a risk, not everyone accepts the risk, and more when it comes to money. So the first strategy that must be followed is to reduce them, an inverse is paying to create something that does not yet exist, and in making decisions, fear is always present. In the studies carried out, they realized that 75% of the projects went beyond the delivery time. Starting here, to have more chance of success and reduce this risk that investors perceive I will discuss the tactics that I have read to be of help when facing that crowdfunding investor who only wants to see results when you still have not finished the project. 1.1 All-or-nothing Model Currently, there are two famous crowdfunding models: Keep-it-All (KIA). Financing is maintained, even if the funds do not exceed the objective.All or nothing (AON). The creator maintains financing if the objective threshold is met. With the KIA model, you can keep the funds. Is this model better? According to the study, although it may seem that it is, it is not the case. There are several differences, with their advantages and disadvantages. Cumming, Leboeuf, and Swienbacher analyzed 47,139 campaigns from the crowdfunding platform Indiegogo to find out which of the two models was most successful at the time the project was successful. The result was that the AON models had more success than those that chose the KIA model. What is the reason for success in this model? Practically, it is the one that most reduces the risk perceived by investors. With the AON method, the investor has a signal that the entrepreneur will not commit to carrying out the project but will achieve the objective. While with the KIA projects the public assumes the risk that the project may fail more over time. 1.2 Breakdown of Donation Expenses Bekkers and Wiepking examined why people donate to NGOs. The conclusions they drew were that people donate because of the effectiveness of the organization since donors feel that with that donation they are contributing something. What is the problem, then? When you have to make a description of your project, the first thing the owners do is estimate the money and then describe it with their words. The problem with this is that those who are going to donate the money do not perceive the value, that is, they can not imagine the benefits they are providing. Bearing this in mind, as a tip you should separate the costs of the project specifically, that is, by indicating how much money each part of it will need. Thus investors are more predisposed to invest. 2. Transmit your reputation Agrawal, Catalini, and Goldfarb examined the types of risks investors face in crowdfunding. Three types were identified: Incompetence of the creator of the ideaFraudProject risks As you can see, there is only one factor that is directly related to the project, the others depend on who is behind it. Trust and quality are important aspects in deciding whether or not to support a project. The error is in focusing on the project itself, and not on you. Investors want to be sure of where and to whom they are going to donate the money. That’s why you can not only rely on telling your project, you must also tell your story, your reputation, and your personality. 2.1 Write about your education and your past successes How can you reveal your reputation? Two useful ways are your education and your past successes. How do I transmit this information? Education The education you have received is important for investors. If the project is created by a Ph.D. or a graduate it will be more likely to have little risk. Past successes If in the past you were successful with other projects, investors will be more likely to invest in you and your project. But not only does it have to be a crowdfunding project, but you can also explain other past projects that you have successfully completed. That will add value to the conversation and your potential investor’s confidence in you and your project. 2.2 Donate to other Crowdfunding projects Other important factors that investors consider are reciprocity, which has two main facets: Direct reciprocity. If you provide value to someone, that person feels obligated to give again.Indirect reciprocity. If you provide value to someone, other people feel compelled to give it back to you. Mostly, people think of direct reciprocity, but the indirect also plays an important role in the online environment, such as the development of open source. Also, if on platforms like Kickstarter you have donated to other projects before, the community will be more likely to finance you. In your Kickstarter profile, this gesture is recognized. Your image (not talking about a picture) is what investors use to value your offer and judge your reputation in the community. That is, if you have behaved well in the community and have invested in projects, donors will see you in a better light. So, one idea that you can get out of here is that before launching your campaign, you must build a reputation in the community, thus be able to originate direct reciprocity. 3. Self-awareness This is not new. It is a logical principle in human relationships: if you want to influence people, you must activate their consciousness. When they become more aware of themselves, they experience more discomfort, which causes them to be more predisposed to get involved to overcome the negative feeling. Therefore, you must activate your self-awareness. For this, we show you several tricks. 3.1. Look at the camera The look is powerful, looking at the camera is essential if you want to convince and make someone aware. In the studies carried out on commercials that go from door to door to sell, it was shown that looking directly at their eyes gave them more profit than not looking at potential customers in the eyes. When you go to record the video do not forget this part. Although you can not forget what you want to say, so prepare a script and memorize it but always with authenticity and conviction. 3.2 Use the second person in narrative form Language is important when it comes to convincing. As a tip, it is better to use second-person pronoun and narrations. This can generate self-awareness from the description of your project in the investors, and thus you will make the messages you send related to messages in your own life. If you incorporate a narrative you will help reduce the tendency of the audience to contradict your message and help the public identify with the characters in the story. To perform both tactics at the same time it is best to describe a narrative with the perspective of the second person. For example, if your project is a play, you can tell the story from the perspective of the spectators. 4. Expand your guilt Even if it sounds bad, when people feel guilty, they perform good deeds. If you manage to feel guilty, donors will experience a strong desire to carry out a prosocial action. But you have to be careful with this type of tactics since they can be misunderstood and produce the opposite effect. 4.1 Reference with a hedonic product A very interesting aspect of the research was to discover that different results are obtained by comparing the price of a donation to a specific product: Utilitarian comparison: “Please donate € 2 to Doctors without Borders. As a reference, this is about the price of a bar of soap.”Hedonic Comparison: “Please donate € 2 to Doctors without Borders. As a reference, this is for the price of a cookie.” Surprisingly, hedonic comparisons are more influential in donating to people. When the donor compares the option of donating with a hedonic product, the choice not to donate can repair selfish motives. And since people do not want to think of themselves as selfish, they prefer to avoid this by donating to the project. 4.2. Reveal personal information According to the identifiable victim effect, we show more empathy towards specific people compared to groups of people. This means that the personal information you include in the description will give strength to your argument and will have a greater effect on investors. The personal information strengthens the identity, that is, the investor no longer sees you as a number with statistics, now he sees you as a real person, behind a project, and that will help boost the financing of the project. 4.3 Publicize the names of potential donors Another tactic to achieve financing in a project is to know the identity of the donors since they feel greater pressure to donate. Since making decisions in public implies facing social sanctions that help prosocial behavior and decrease antisocial behavior. This tactic can be applied if the developers of the crowdfunding platform consider it necessary to know the names of the people who show interest in a campaign, adding data about who visits the project, who likes it, profile images, etc. 5. Provide the Appropriate Rewards Crowdfunding platforms are different and depend on the rewards system they use. We have several types: Donation. There are no rewardsReward. The rewards are non-financial (for example, products)Loans. Financial returns (for example, interest)Equity. You get a return on the shares (for example, stocks, dividends). Donation platforms are the most difficult to find prosocial conversions. What kind of rewards should they offer? Kickstarter describes the five most common awards: 1. The copies of the project. (for example, a complete album) 2. Limited editions. (for example, a complete album with a bonus track for the sponsors) 3. Collaborations (for example, donors collaborate in the project) 4. Experiences. (for example, visit the recording studio) 5. Memories. (for example, donors will be named in the album’s thanks) 5.1 Publicize the names of real donors In the study of Bekkers and Wiepking (2010), where more than 500 studies on charitable donations were analyzed, they came to the conclusion that what it takes to donate to people. Reputation is one of the key factors. People experience conspicuous compassion, that is, they donate because they want other people to see them as compassionate. That is, they want to be seen showing compassion. How do you use this tactic? For example, imagine that you want to get funding for a play, in the program of the work you will know who the investors of the work are and order them by importance. This will create “aspiration groups.” Investors may feel pressured to reach the top level of this hierarchy, and so they will have to donate more money. The study shows that if we focus on publicizing donors, the donation option increases, and if you give them the option that others may know their donation to your project will influence a greater amount of funding. 5.2 Give tangible rewards and practices The best rewards that a donor can obtain is economic, it is one of the strongest factors to decide whether or not to invest in crowdfunding projects. If investors do not notice that they are receiving an amount of value for their money they will back out. In addition, tangible rewards are those that generate a strong perception of value and have a positive effect on the decision. The researchers found that tangible rewards generate the strongest perception of value. 5.3 Incorporate several levels of reward The crowdfunding platform Kickstarter, which is one of the best, currently gives the option to reward by levels, that is: For € 1, you get XFor € 5, you get YFor 25 5, Z is achieved The studies that analyzed the Kickstarter projects between 2009 and 2012 showed that the most successful projects offer a greater number of reward levels. What is this about? According to an investigation, donors participate mainly for two reasons: fun and performance. The more reward levels you find, you will find the project more attractive and fun. Fun rewards are usually quite effective, therefore, your goal would be not only to provide economic value but to make the rewards valuable in the sense that they contribute something beyond the tangible. 5.4 Add new rewards in the final stages There are some creators who are adding content rewards during the process that add something new to the project, such as a new idea, concept, etc. These are some of the strategies of persuasion to get funding in Crowdfunding. If you want to know more and have some project to tell us you can contact us, we are open to any idea.