What does it take to make it big on Kickstarter or Indiegogo? And more importantly, does it really matter if you don’t cross your target threshold?
It’s hard not to feel some level of retail envy when you see other crowdfunding campaigns raking in millions of dollars. On the surface, it looks like those businesses have it all together and are on their way to becoming a household name.
But in reality, a strong crowdfunding campaign doesn’t guarantee success, just like winning the lottery doesn’t mean all your money troubles will instantly vanish.
Rather, striking it big in the retail world takes more (a lot more!) than funding. And just like a great crowdfunding campaign doesn’t guarantee success, a failed one doesn’t mean you’ll never see a profit, either.
Why You Can’t Rely on Crowdfunding Alone for Retail
Most crowdfunding campaigns fail, with Kickstarter reporting that just 37% of their campaigns actually reach their goal. To be fair, it’s not as easy as it looks. On the surface, successful campaigns will develop a product, make a cool video, write up a catchy description, and wait for the donations to roll in.
But the reality is that it takes a TON of careful planning and more than a little PR and marketing. Not to mention, companies who do run successful campaigns have likely invested thousands of dollars or more just getting their campaign off the ground.
Companies are investing tons of time in helping their campaign gain traction right out of the gate, because if they don’t, they stand a much greater chance of not reaching their goal.
Hands down, luck has nothing to do with a successful crowdfunding campaign. It’s not the act of crowdfunding itself that makes or breaks you in retail, but rather all of the exposure, marketing, rewards, customer service, and PR that comes with it. And to be successful, you need to know how to execute and maximize all of the above.
How to Set Yourself Up for Retail Crowdfunding Success
For all its potential pitfalls, crowdfunding is still believed to be a panacea of sorts for some businesses to get to the next level. Granted, platforms like Indiegogo and Kickstarter have been game-changers for many companies who may need to raise funds quickly, and while there is no way to guarantee your success, there are some things you can do to give yourself a fighting chance:
First, be realistic about your competitors. There are thousands upon thousands of other entrepreneurs using the same platforms to fund their ventures, so not only are you competing on a product level but also for visibility on the platform.
Also, focus on selling the story of your product, not just the product itself. Share your dream and bigger visions for your product if it were to become successful, such as how it might change the world or improve others’ quality of life.
Finally, leave no detail to chance. Everything from your branding to your pitch to your reward program must be carefully considered before launch. You still might not reach your goal, but every new backer will bring you closer. For more retail insights, head back to our blog