10 Common Crowdfunding Mistakes & How to Avoid Them

There are 10 Common Crowdfunding Mistakes. Keep in mind and Avoid Them!

Skylar

November 7, 2022

1. Don’t Make Promises You Can’t Keep

Crowdfunding at its core is an agreement between you and your backers. You promise to complete your project based on a certain schedule and deliver a useful product in exchange for financial backing. Sounds simple right? But product development is complex, has many moving parts, and over the course of a crowdfunding campaign, there are many things that can go wrong. Being able to stay on schedule, deliver a product with promised features, and ship on time requires careful planning, dedicated work, and dependable manufacturing & logistics partners. 

The key to avoiding the pitfall of not delivering on your promises to backers requires important upfront work. Before your campaign goes live you should have a working prototype and a path to complete any features still in development. Your team should also have an experienced manufacturer who can maintain the necessary production schedule. Your logistics partner should already be contacted and you should have accurate estimates of your product shipping and packaging costs. Getting these essential tasks going early will help you succeed. 

2. Don’t Neglect Your Email List

Building a quality email list of potential backers pre-campaign is the #1 way to ensure that your project gets off to a great start and builds momentum toward success. This important step should be a part of your pre-campaign plan and should begin weeks or even months before your campaign. Start your email list with friends and family, add to your work networks and build an attractive landing page that demonstrates your product’s value. Use persuasive copywriting and a strong CTA (call to action) that captures emails. Then promote the page and drive traffic there with promotions, link-building techniques, and advertising campaigns. Engaging your email list is the best method to earn early backers, boost the visibility of your campaign and gain essential early momentum toward your goal. 

3. Don’t Set Unrealistic Goals

Creators should carefully consider the funding amount selected. Be realistic with this number. Start by determining the costs of creating your product including production, marketing, and shipping. In general, you want a funding goal that covers your costs but is low enough to be attainable. It is better to start with a smaller goal and exceed it, than to set your goal too high and not reach it. One important reason is that campaign progress in relation to your funding goal will earn the attention of the crowdfunding platform algorithm and that can place your campaign more visibly or garner more mentions and recommendations. 

4. Don’t Wait to Start Building Your Community

A key step to a successful crowdfunding product launch is getting people excited and talking about the project before its release. It is never too early to begin building a community around your campaign. Growing a community early is a chance to gain a core group of super fans that can be your biggest advocates who will help create buzz and share the campaign with their networks. To build an active community, start with social media pages, forums, and other channels. Create a space where people can interact with your team and other fans. Build a conversation and participate. Feed followers with insider information, news, and shareable content about your product and campaign. Use these channels to build an audience that you can engage throughout your campaign.

5. Reviewers and Influencers

Great products succeed by turning users into enthusiastic advocates who talk about why they love them. Seeing images of your product can only go so far, people want to see it in action. They also trust the opinions of their friends, networks, and influencers. Don’t forget to get your product into the hands of reviewers and influencers. Leverage their large audiences to get more eyes on your campaign. Influencers in your niche can persuade potential backers to invest in your project based on their favorable opinion about it. Use this technique on your landing page as well, with user testimonials about your product or service. 

6. Always Make Each Reward a Bargain

Make your reward structure easy for visitors to understand. Too many rewards or complicated combinations can impede backers. Keep it simple, you can always roll out Add-Ons and Stretch Goals as your campaign progresses. Also, make each reward a value for the backer. You should show appreciation to your crowdfunding backers with a discount or attractive offer in exchange for their early adoption of your product. 

7. Never Fail to Make a Good First Impression

When you present your product digitally on any of the crowdfunding platforms, first impressions are everything. Because your potential backers cannot physically touch or use your product, they have to make a buying decision based on what they see. The visual assets that you present are your most powerful tools. Don’t make the mistake of using low-quality photos of your product. Although you may be able to snap a few shots with your phone, those images may not convey the quality of your product when viewed by backers. Use a professional photographer, and make the investment to get perfect images of your product that show professionalism and quality. Put extra effort into your video production because most backers start there. Your video should quickly and clearly demonstrate the value of your product. 

Crowdfunding is about trust, making your product look like a million dollars and you will be able to price it appropriately. If your product is more complex or has multiple modes of use, create graphics and animations to fully demonstrate how it works. Combine these with clear, concise, descriptions that outline the features of your product and the way it uniquely solves a problem for your backers.

8. Don’t Stop Communicating

A crowdfunding campaign is different than an online store. It’s not simply a place to buy something, it is a platform for backers to be directly involved in the creation of a product from start to finish. Don’t make the mistake of not being communicative and inclusive with the people who have invested in your success. Keep your content fresh with timely updates and reply to questions and comments from your community and backers. Be transparent and honest about the product development process and let your backers look behind the scenes as their rewards come to life.  Earn trust and build excitement with your enthusiasm and regular communication. Make your crowdfunding campaign a partnership between your team and the people who are backing you. When people feel involved they care more about your success and are willing to help and share your campaign. This kind of effort costs little but has a huge return.

9. Don’t Lose Momentum

Running a successful campaign takes work. Even with careful planning and pre-launch tactics, it is important to keep up the momentum. The amount of traffic to your campaign will directly relate to how many backers you earn. After you launch, continue to drive traffic using your email list and outreach to reviewers and influencers along with advertising efforts. 

10. Don’t Forget How Big the World Is

One of the biggest mistakes that crowdfunding creators make is to not consider the costs of packaging and shipping. It is difficult to estimate the unit cost of shipping to all locations worldwide due to differences in customs charges, taxes, and fees. Get in front of this issue early by reaching out to logistics companies that specialize in shipping for crowdfunding. This is essential to accurately estimate overall costs and keep your backers happy.

Crowdfunding on Kickstarter or other platforms is a great way to raise money for a project launch but there are pitfalls to avoid along the way. Keep these common mistakes (and how to avoid them!) in mind as you plan your campaign or reach out to a crowdfunding agency for help. A little forethought will help you avoid the most common crowdfunding mistakes and get your campaign to its goal. 

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