If you are thinking of getting your product on retail shelf, try crowdfunding your new product first. The process of getting from idea to retail shelf isn’t easy. Some take their ideas directly to market through online retail while others need outside funding to make that dream a reality. For those in the latter group, crowdfunding provides a way to market test, gather feedback and establish a track record that will appeal to retailers.
Why Crowdfunding?
Crowdfunding is the ultimate market test. Before sinking unnecessary money and time into manufacturing a product, make sure there’s genuine market interest. Crowdfunding places new ideas before a group of consumers who enthusiastically support ideas that haven’t come to market yet. If they pre-order your product during a campaign, that signals to retailers an interest in the product.
Crowdfunding new products generally takes place on Kickstarter or Indiegogo, though equity crowdfunding may be an option for some business ventures. In crowdfunding, entrepreneurs take their new ideas and market them. You’ll showcase what makes your product unique, what problem it solves, and why consumers need it in their lives. Unlike jumping directly to ecommerce or approaching retailers early on, crowdfunding creates a dialogue between consumers and the product creators. As a creator, you have the opportunity to learn a lot of valuable information about your idea and your customer.
Understanding Your Product
You may know the ins and outs of how your product works. You likely created the product to solve a specific problem and have an idea of how your customers would use it. You might also have blind spots. Crowdfunding platforms offer supporters a direct line of communication with the creators themselves. The comment section of a campaign page often provides valuable feedback as backers consider how they’d use the product and offer suggestions or ask questions.
Smart creators leverage the feedback in comments to improve their products. Take RocketFire for example. Their first campaign successfully reached its public funding goal, but the creator decided to cancel the campaign because of feedback he received in the comments section. Backers expressed a variety of concerns including the company’s use of a proprietary fuel source. Rather than sticking with their original product, they went to the drawing board to improve their product. RocketFire’s creator said, “it was the best thing that’s ever happened to us. To have all that criticism and to be able to use it to our advantage.” When RocketFire relaunched a second campaign, it went on to raise more than $200,000.
Understanding Your Audience
Another benefit to crowdfunding is a period of time where you’re able to test marketing language and creatives to learn more about your customer. It’s true that crowdfunding backers are a specific audience, and your product may resonate with other groups. But advertising efforts during the crowdfunding campaign itself can reveal interesting data about your backers.
Dedicating a reasonable advertising budget during the campaign is important as you’ll be able to test different audiences and targeting initiatives. You may be surprised to learn who your product resonates with.
Gather Real Data
When you approach retailers with your product, they’ll want to know if the numbers work for them. In running a crowdfunding campaign, you’ll have those numbers about sales, price point, and audience data. Rather than relying only on market size and forecasted sales numbers, you’ll have data from real customers to showcase demand.
Your advertising efforts will also yield a treasure trove of data that can be used to land retail partnerships. You’ll have detailed information about who your customer already is in addition to forecasts of who your customers could be. You’ll be able to point to ROAS and CTRs to showcase interest. Without crowdfunding, you’ll know early whether your idea is ready to take to store shelves, or if it needs to be reworked.
This guest blog past was provided by Roy Morejon at Enventys Partners, a product development and digital marketing agency. If you feel launching your new product idea on Kickstarter or Indiegogo is tough or daunting, Enventys Partners can help. Reach out to them today for more information.
