We are going to talk about the benefits of crowdfunding besides the funding, but the other 6 business benefits. Crowdfunding is an incredible business tool that provides many benefits to any business that puts them into action. It’s not all about the money. Yes, the money might be the driving factor behind your campaign, but you stand to gain a whole lot more from crowdfunding. Here’s our quick rundown of the 10 (yes, ten) BIG benefits of crowdfunding:
1) Market Research
Crowdfunding is the perfect tool for very low-cost market research. Social media is a one-to-many communication channel, but it also provides a many-to-one dialogue. This dialogue capability provides a platform to receive feedback that can provide answers to many questions that can save you both time and money. The crowd will provide an answer- yes, no, or not right now. They can provide many insights for product development. A successful campaign can help you gauge size of the potential market for the product.
2) Focus Group Like Product Feedback
If you have taken the time to properly engage and excite your crowd then you have built a level of trust that will provide much-needed focus group like feedback. Your crowd will tell you what they like about your product and share their ideas for improvement. Your crowd will invest in your story (emotionally and financially). Your crowd will be so much more than just another customer; they will consider themselves a part of your project. Take pride in your success and are much more likely to get involved in helping spread the word than a traditional consumer. This is the unseen value of an excited and engaged crowd. This is why it is vital to take the time to build a trust based relationship with your crowd.
Your crowdfunding campaign should become a pre-selling machine for your product or concept that is driven by your engaged and excited crowd. The number of pre-orders will provide some insight into the size of the market. Your Crowdfunding campaign is a place to sell a product or concept before you’ve brought it to market and this process allows you to start production with little or no financial risk. For many people, this is the major benefit of crowdfunding.
4) Crowdfunding Provides High-Energy Promotion
Crowdfunding requires a concentrated high-energy marketing, promotion, and public relations blitz. Full-out marketing and promotional blitz from the safety and corners to the linebackers. Once the pre-launch begins it is a nonstop march to the final day of the campaign. During this 3-6 month period, you become the number one cheerleader for you campaign beginning with your closest family and friends to your social media activities to build an email list to the media that has the ability to push your story out to millions.
5) Loyal Brand Advocates
There’s no question about it; crowdfunding builds you a team of loyal customers, but these customers are so much more. They are brand advocates that will shout from the highest mountain about the good thing they have found. They are part of your success and as such the revel in the growth of your brand. They will buy your latest product, respond to your surveys, push out your latest social media or blog post and smile the entire time and this is a benefit of a well organized and implemented crowdfunding campaign.
6) New Partnerships and Relationships
You’re not just targeting backers and the media. Create a buzz around your crowdfunding campaign, and you could draw out potential partners and investors as well. Don’t underestimate the power of a professional network to bring benefits. One campaign did not reach its goal, but an investor found the product and made the engineer a deal that he could not refuse. Optimize your crowdfunding campaign to attract new partners by ensuring your campaign is literate and includes testimonials from people you’re already working.
There are far reaching benefits to a well organized and implemented crowdfunding campaign as illustrated above. On top of the benefits mentioned in the post, there is, of course, the rewards of the successfully funded campaign which will provide many backers that will result in a large database of highly targeted customers brand advocates.