Here at the Crowdfund Masterminds group we take money seriously, and we’re not just talking about money raised for a project. We’re talking about the money spent on promotions and other investments needed to get a crowdfunding project funded. At the end of day if you raise $10,000 but need to spend about the same amount just to get it off the ground then obviously crowdfunding is in trouble. You might be asking, how does anyone ever invest $10,000 in their crowdfunding project? Well, in our Mastermind community we’ve heard some horror stories. One big one comes to mind, where a startup invested in the following:
- full video production and editing ($2500!)
- content professionally written for page ($650)
- graphic design work for logos, page content, etc ($500)
- website design ($2000)
- PR campaign, fully managed by agency ($1200)
- Facebook ad clicks, ran by her team ($1500)
- Social media marketer, full time for 1 month ($2000)
Total spent = slightly more than the money raised! Crazyness!
This above example (we won’t say exactly who) shows why crowdfund spending can quickly get out of control on non-essentials. You can see above that most of the money spent was not even on direct marketing functions, i.e. things that bring backers to the project. For instance, $2000 on a website, another $2500 on video production, and a combined $1150 for just making the page look nice. That’s already $5650 spent on making the page look good before anything has even been spent on actually getting people to see the page! As you can see, you can do your best on the non-essentials and then save your money for marketing. Image if that $5650 were spent on marketing instead? For instance they could have increased the Facebook ad spend, and also replaced the “full time social media marketer” with several effective social media marketing agencies instead. For instance, why spend $2000 for 1 person when you can give that to a whole agency team to push your project forward.
We’re getting a little sidetracked (which admittedly always seems to happen in these mastermind discussions), so let’s get back on topic: What do crowdfunders need to know about crowdfund marketing services?
1) Focus your marketing budget on direct marketing functions, i.e. getting people to your campaign page:
Don’t waste your money on all the fuzzy stuff. Believe us, there’s a lot of it out there. From building a new website to buying your own crowdfunding coffee mug. Before spending another dollar you need to ask yourself, does this actually get me more backers?
2) Don’t mess around with paying individual people to promote your stuff:
Don’t rely on one or two key individual freelancers to promote your project. If they flake out or simply suck at what they do (which might be the reason why they are freelancing) you’re screwed. Many of them are looking to put in the minimum time and take a large lump sum of your marketing budget. They don’t have a business reputation to protect, nor do they have any real liability to perform. Instead, you can get a lot more value from hiring an agency that you know will produce results.
3) Hire people according to your weaknesses:
This is an age old tactic for CEOs and entrepreneurs. You always want to hire people who are strong where you are weak. For instance, if you’re okay at graphic design then go for it and do it yourself. However, if you have no idea how to run Facebook ads or target people on twitter, then hire someone ASAP. You will save time and money in the long run if you hire people who are great at your weakest spots.
4) Make sure the company is legit BEFORE you pay:
Most people simply google a company and say that they “did their research”. This is junk. The best way to research an internet company is to research they actual domain name. Many of our members are super surprised when they do a “whois domain search” to find that some of these sketchier marketing services are actually based overseas in the most random places. Do your research or say goodbye to your money!
5) Don’t do press releases, $5 fb shares or any $5 tweet share gimmicks
Last week we interviewed John Border, the founder of CrowdChirp.com about his innovative new tool to help crowdfunders get more backers from Twitter. Speaking about the many offers one might receive for their crowdfunding project, John said “there are always some exceptions, but most of these $5 for fb shares or $5 for a retweet garbage or a magical press release biz needs to go. Crowdfunders needs to realize that promoting a crowdfunding campaign takes real work, not tricks & gimmicks.” Keep that dose of truth serum close in mind before spending a large piece of your marketing budget.