10 Psychological Tactics for Successful Crowdfunding

By Theresa Weaver 

If you look up crowdfunding on the internet the definition that first comes up is “the practice of funding a project or venture by raising many small amounts of money from a large number of people”. Sounds simple enough, but honestly crowdfunding has a lot more to it than just raising small amounts of money, it takes thoughtful planning to execute a successful crowdfunding campaign. Lucky for you I have compiled 10 psychological tactics to help make planning easier and to set yourself up for success.

Tactic 1: Set your crowdfunding goal. You want to set two fundraising goals, a private goal, and a public goal. Know that smaller is better for your public goal, people want to participate in something they see succeeding. Smaller goals seem more achievable. Set your private goal higher and use stretch goals and the momentum from hitting your public goal to fill in the gaps between your public and private goal.

Tactic 2: Plan your crowdfunding campaign ending date on a day that is memorable, this makes it easier for people to recall. Good examples of memorable days are holidays or the last day of the month, and the first day of the month.

Tactic 3: Craft your story. Focus on your WHY, the impact or problem you are trying to solve. Remember that relationships are powerful, and people connect to people, so focus on one relatable individual’s story and the impact that the product or donation would have on them.

Tactic 4: Use a campaign video to tell your story! Campaigns with visual stories do 400% better than campaigns without. Your video not only can educate your audience but is also a great way to establish a more personal connection with them, this leads us right into our fifth tactic.

Tactic 5: Start your video off with a person delivering an attention-grabbing statement, a nice example could be a statistic of what you are hoping to solve. In the video focus on the why, then present an impactful solution, and provide a clear call to action as to how the watcher can help. You want to start your video off with a person and not B-roll or a photo because people are less likely to ignore people when scrolling through a website. For more tips on your video check out this article!

Tactic 6: Set reward levels at common intervals, $1, 5$, $20, $50, $100, for a good outline to setting these check out this article about reward levels.

Tactic 7: Set daily micro goal deadlines. Achieving your entire goal might seem daunting but by setting smaller goals along the way you not only set the pace to achieve your goals, you create mini successes for your backers and fuel the momentum towards your campaign.

Tactic 8: Soft launch your campaign and strive to get 20% funded. Solicit donations from friends and family before you publicly launch your crowdfunding campaign and aim to get 20% funded through them. When you can launch your campaign with funding already secure you start gaining momentum to continue the success as soon as you launch publicly. For more tips on soft launches check out this article from Indiegogo.

Tactic 9: Bring influencers on board to your crowdfunding campaign to help spread the word. Reach out to more smaller influencers instead of a big influencer. This will be beneficial for two reasons, 1. they are less expensive and 2. By reaching out to multiples you can still achieve the same reach as one large influencer.

Tactic 10: Provide updates. Keep your backers updated throughout the campaign. Send out thank you notes to backers and let them know when micro goals and stretch goals have been met. This communication allows you to continue the relationship and keeps your campaign fresh in their mind likely leading them to share it or donate again.

Learn the skills of crowdfunding, and other digital marketing tactics through the UMSL Digital Program.  Classes enrolling today!

How Crowdfunding Changed The World: Interview W/ Ryan Brennell

UMSL Marketing recently talked to Ryan Brennell, founder of Gladitood, and how the era of social interaction has re-shaped the way we give! Ryan will also be teaching an exclusive ‘Crowdfunding 101 ‘ class as part of the revamped UMSL Digital curriculum!

We live in the era of social organizing. How has Crowdfunding been a part of this trend over the last five years?

I think crowdfunding is a natural progression of social organizing. We’ve been using Facebook to stay in touch with friends and family, or Reddit to talk with like-minded individuals about shared interests, and I know it’s easy to connect the dots looking back, but it just seems like Crowdfunding was inevitable. We’re making it so easy for people to connect from all over the world, it was only a matter of time before we started using this medium to raise money. Now we’re seeing it on a scale that is changing our culture. Bernie Sanders just ran the most successful political crowdfunding campaign in history during the last election. Startup founders aren’t at the whim of venture capitalists who held all the power. Now they can find their audience and let the market decide if they should be funded. Thanks to social organizing, we have crowdfunding. And thanks to crowdfunding, new opportunities exist for us all.

Crowdfunding services such as GoFundMe are everywhere. From school supplies, family tragedy’s, to lifelong dreams. How has this changed fundraising culture?

I think that the many crowdfunding platforms that have popped up, especially those like GoFundMe where anyone can raise money for nearly anything, has increased competition for fundraisers and also increased an individual’s awareness of fraud. Crowdfunding has completely democratized access to funding. If you can tell a compelling story and execute a clever promotional plan, access to a wealthy network isn’t necessary anymore. It has also made fundraising a very real piece of pop-culture. The subjects of viral campaigns become overnight celebrities, and this perpetuates the biggest myth in crowdfunding – “If you build it, they will come.”

Despite the abundance of crowdfunding campaigns, many generate zero dollars. Why is this?

The failures almost always come down to that crowdfunding myth. The idea that crowdfunding is internet magic is the reason why the vast majority of crowdfunding campaigns fail right out of the gate. You have to put in the work.

Crowdfunding campaigns can be very difficult to dissect. We see the success, but we can’t get a good look under the hood to see what’s driving those results. This makes it very difficult for those new to crowdfunding to figure out where to begin. After years of helping hundreds of campaigns succeed, and seeing plenty fail, we’ve recognized the patterns and formulas that lead to both results. Frankly, 90% of the work for a successful campaign happens before it even launches.  Realistically, there were several weeks – sometimes months – of planning ahead of a successful 30-day campaign.

Basically, crowdfunding is not a magic ‘Easy’ button. It takes work. How can someone approach this?

I like to approach it by creating a two-part plan. Part one consists of everything you need to get in place in order to put the campaign together and set yourself up to execute successfully. Part two is the actual execution.

Part one is about crafting your story, strategically planning your reward levels, identifying and building relationships with your audience, and lining up distribution channels for your campaign. This means making a video and creative graphics, coming up with creative and unique “up-sells” that don’t dip into your profits, figuring out which social channels and forums to engage, and creating a PR plan. It sounds like a lot, but if you tackle these, you are in the top 10% of your competition. If you take part one seriously, part two is a breeze. If you half-ass part one, those 30-60 days might be the most stressful of your life.

What will your new Crowdfunding course be touching on? Who is this course for?

The course is for anyone who wants to learn how to run a successful crowdfunding campaign from day 1 of planning through day X of follow up after the campaign has ended. Nonprofit organizations, startup founders, marketers, and inventors, I’m talking to you. My goal is that my students leave with not only an understanding of how to run a successful campaign but with their own concrete plan of action.  We’ll cover how to craft your story to include the four key ingredients for virality, how to identify and engage your target audience, how to utilize distribution channels to increase your reach. We’ll go over creating a great video – even without access to a professional production team, building an email and social campaign to accompany your fundraiser, and how to capitalize on the momentum of success after your campaign to keep backers engaged for your next fundraiser. The course will include a number of case studies that break down some of the most successful crowdfunding campaigns in history, including successful campaigns from right here in St. Louis!