Category: rewards

This is the twelfth post in our 30 Day Ask Clay Crowdfunding Q&A.

I’m answering a new question every day in June.

Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.

Full Transcript

Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…

How long should my crowdfunding campaign run?

This is a great question and definitely one that’s on the mind of everyone doing a crowdfunding campaign.

The answer is extremely simple.

“Your project should last 30 days.”

This gives you enough time to execute the plan, not get fatigued and stay sane.

It’s also a short enough duration to maintain urgency for the backers.

Now this isn’t just my opinion or common sense, Kickstarter has published data that 30-days is the sweet spot for crowdfunding campaigns.

Now there are some exceptions, if you’re going to be on the road the last few days of the campaign, it’s fine to extend it a day or two or even three or four, but don’t run a 60-day campaign because that’s too long, people are going to lose interest and there’s not enough urgency for the backers. It’s OK if it’s not exactly 30 but 30 days should be the target duration for your campaign.

As always, you can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay

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This is the eleventh post in our 30 Day Ask Clay Crowdfunding Q&A.

I’m answering a new question every day in June.

Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.

Full Transcript

Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…

Why do crowdfunding projects succeed or fail?

This is obviously a great question and one that’s on the mind of everyone doing a crowdfunding campaign.

Well, there are really only two reasons any crowdfunding project succeeds or fails. Yes, it’s really only two reasons.

1. Traffic and
2. Conversion

Traffic is simply how many people visit your page. I have yet to see anyone successfully back a crowdfunding campaign without first seeing it.

Conversion is the percentage of those people who back your project and actually pay you.

Another way to think about this that’s a little easier to remember and a little more mnemonic is “Play” and “Pay”.

Play is how many people “play” your video.

Pay is how many people pay, or back the project.

What impacts traffic? What impacts conversion?

There are essentially seven things that impact traffic and seven things that impact conversion.

The 7 things that impact traffic are:

1. The permission asset (often an email list) that you build before you launch your campaign
2. Social media
3. Social sharing
4. Organic traffic
5. Paid traffic
6. Platform traffic
7. Press (listed last for a reason)

The 7 things that impact conversion are:

1. Your product
2. Marketing to the right people
3. Your story (told via your video)
4. Your rewards and pricing (and their relative value)
5. Social proof
6. Press
7. Progress + momentum

The traffic fallacy

I’ve seen projects succeed or fail because of every single combination of traffic and conversion, but I want to explain one of the biggest mistakes I see creators make.

Most creators think they need more traffic. They’re wrong.

Most creators need better conversion.

Let’s look at a simple example

Let’s say your campaign has a funding goal of $30,000.

If your average contribution per backer is $30 and your campaign converts at 10%, meaning 10 out of every 100 people who view your campaign, actually back your campaign, you only need 10,000 total views of your campaign. The math is pretty simple…

10,000 views * 10% conversion = 1,000 backers at an average of $30 per backer = $30,000

Now let’s say everything else is the same, but your campaign only converts at 2%, meaning 2 out of every 100 people who view your campaign, actually back it. Now, you need 50,000 views of your campaign. Again, the math is…

50,000 views * 2% conversion = 1,000 backers at an average of $30 per backer = $30,000

So the lesson is, if your campaign converts well, say at 10% vs. 2%, you need a lot less traffic.

More traffic with poor conversion is like water through a sieve.

And it’s much easier to pull the levers to optimize the elements that impact conversion (ideally before you launch) than it is to scramble to get more traffic.

As always, you can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay

End Transcript

This is the tenth post in our 30 Day Ask Clay Crowdfunding Q&A.

I’m answering a new question every day in June.

Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.

Full Transcript

Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…

What are the characteristics of a successful crowdfunding campaign?

I’ve helped almost 150 crowdfunding campaigns and while each one is different, there are seven key characteristics that I see across most successful campaigns.

I’ll explain each below.

1. A new and interesting creative project

Crowdfunding is the coolest store on the internet. It’s not the place for moving old inventory or selling accounting services. When marketed correctly, new and innovative projects do well. This isn’t Amazon. Backers are willing to wait for months for early access or one of the first units of a cool, new thing.

2. A well-defined customer avatar and market

If you think your product is for everybody, it’s for nobody. Start over and define your ideal customer. If you only had one unit of your product, who would be the perfect person on earth to buy it? That person is your ideal backer. Start there.

3. Permission to talk to them

Lee Miller, the creator of Kittyo started with zero emails and built a list of 13,000 cat lovers in six months. When he launched, he was instantly funded, 200% funded on the first day and ended up raising over $270,000…all because he put in the work before he launched to find and gain permission to market to the right people.

4. A solid marketing plan

Good crowdfunding is good marketing. You probably need less than 1,000 backers to completely fund your project, but you need to develop a marketing plan to reach those people before you launch. Don’t launch and then scramble around trying to find them. That’s how most projects fail.

5. A great video that tells your interesting story

A great video is your chance to tell your story to the world. Big companies spend billions of dollars to try to get us to watch a 30-second soap commercial or 8 seconds of pre-roll on YouTube. But if you can get someone to click on your campaign link and play your video, you can have 2-3 minutes of their attention. That’s priceless. Don’t waste it.

6. Great rewards at below market prices

As we explained in the last lesson, you should price your reward levels “below MSRP”.

7. Early and frequent communication and support

As we discussed earlier in this series, backers are taking an early risk on you, so early and frequent communication is key to keep the in the loop on your team’s progress.

So to recap…

The seven elements of a successful crowdfunding campaign are:

1. A new and interesting creative project
2. A well-defined customer avatar and market
3. Permission to talk to them
4. A solid marketing plan
5. A great video
6. Great rewards at below market prices
7. Early and frequent communication and support

As always, you can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay

End Transcript

This is the ninth post in our 30 Day Ask Clay Crowdfunding Q&A.

I’m answering a new question every day in June.

Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.

Full Transcript

Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…

How should I price my reward levels?

This is a great question and something a lot of creators get wrong.

Before I explain the answer, I want to explain why so many creators get this wrong.

People conflate crowdfunding with fundraising and charge higher than MSRP. That’s a mistake.

I’ll explain…

In charitable fundraising, let’s say a fundraising gala for your favorite charity, the whole point is to overpay for what you’re getting. The chicken dinner doesn’t cost $100 per plate.

The price of the chicken dinner is “above MSRP” or “manufacturer’s suggested retail price”.

You put on a tuxedo or a cocktail dress and intentionally overpay to support the cause.

That’s fine for fundraising but rewards-based crowdfunding is not fundraising.

That’s the mistake that most crowdfunding creators make. They price their reward levels “above MSRP”, just like the chicken dinner at the charity gala.

When you see a new author charge $15 or $20 for the digital version of their book, that’s “above MSRP”. Anyone can get almost any book they want on Kindle for $9.99. Amazon has trained us that MSRP for a digital book is $9.99 and I can even get Malcolm Gladwell’s book for $12.99, so why would I pay $20 for a stranger’s book?

In rewards-based crowdfunding, you want to price your rewards “below MSRP” for one big reason:

Price your rewards below MSRP to account for fulfillment risk.

When someone orders something from Amazon or Zappos (or if they walk into a local store) there is essentially zero fulfillment risk. They’ll get exactly what they paid for, either immediately or in the case of Zappos or Amazon, with free one or two-day shipping. No risk.

In crowdfunding, there are a lot of elements of fulfillment risk…

• The product may not be complete yet.
• It may not arrive anytime soon.
• It may not arrive by the promised fulfillment date.
• It may not arrive at all.
• When it does arrive, it may not be what they had expected or hoped for.

Your backers are the people who are willing to pay you cash today for the promise of you and your team fulfilling what you promise at some point in the future. They’re not just backers, they’re your first, best customers.

These backers are taking a chance on you creating and successfully fulfilling your new thing. They’re giving you their hard-earned money on a promise and trusting in you weeks or months before your product even exists. For that, they deserve a discount.

So to recap…

Rewards-based crowdfunding is not charitable fundraising.

Because early backers are paying you now for basically a promise of production or delivery at some point in the future, you should price your rewards “below MSRP” to compensate for that fulfillment risk.

As always, you can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay

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