Crowdfunding/hyper
funding/crowd financing by its nature and format is an improved funding option
that not only earns you money to support business, but also provides a range of
aligned values and benefits. It is a practice of securing fund by asking a
crowd of people (instead of banks, venture capitalists or angel investors) to
unitedly support and donate a specific amount of money for the development of a
cause, idea or project.
One of the initial
examples of Crowdfunding is that of Australia's Blowfly Beer, which with the help of
emails and internet word of mouth, received the support of around 40,000 people
to invest in their company. "The investment pitch was pretty simple - give
us money and we'll give you equity and beer," via CrowdFund Connect.
So, it is all about
finding out targeted people (rather than one governing body) who are mutually
eager to invest in an idea for (tangible or subtle) benefit. Besides money,
here's how crowdfunding can help you leverage the full potential of your
project:
Pre-sells your idea through comprehensive market
research targeting the right audience:
This is one of the most
beneficial aspects of crowdfunding. Pre-selling your idea or project helps you
make an extensive research on the market with insights that evaluate risks and
inputs that improves the scope. When a project is publicly accessible, you are
likely to get increased exposure of potential audiences whose responses and
reactions let you know whether your idea really has takers or does it have a
market in general. If people are not buying it, chances are your project
doesn't have a market or the contemporary setting is still not ideal to launch
your idea. This also means modifying your marketing ideas and increasing its extent
to suit customized taste of potential investors so that even if the market is
not ready for your project, you can create a scope.
Builds loyal customer bases who return to your
business because of value offerings:
With crowdfunding, you
are likely to generate people's participation when you offer rewards (equity
and beer in the case of Blowfly Beer). Now, if you succeed in providing value
offerings to them, they are more likely to buy the products you make to enjoy
increased benefits. So, quality rewards opens scope for future sales leads by
creating repeat customers who are loyal and pro to your business.
Influences future customers by making today's
customers happy:
This is where case
studies and testimonials come in play. Going forward, the market is so
competitive you need to convince your future customers creatively and
authentically to trust you and continue using your product. Crowdfunding also
creates the scope because when you deliver products or services to customers
you gained through this crowdfunding process, they are likely to give
affirmative feedback provided they like it. These testimonials can collectively
influence your future clients. There are more reasons for them to trust your
service because the feedback and testimonial are authentic and not manipulated.
In addition, you can create case studies based on winning solutions to even
strengthen your service profile.
Creates scope for word of mouth marketing:
The best form of
marketing is the one that goes viral through word of mouth. And, crowdfunding
exactly does the same. People interested in your project would share your idea
and the opportunities in your project with their friends, neighbours,
colleagues and thereby create popularity without having you to directly
involving in the whole process. So, without spending any money on the initial
marketing, you can gain thousands of people turned investors turned customers.
Besides the above,
raising funds through crowdfunding is easier and simpler compared with
traditional funding options. It generates increased opportunities of collective
development from the very base for any businesses as well as makes product
innovation more social and advanced. To conclude, crowdfunding is a trusted
social funding process which if played well can earn you results and not just
profit and values, not just hard cash.
