Three Marketing Strategies for Small Business Crowdfunding Campaign Success

The United States Securities and Exchange Commission (SEC) recently adopted rules to monitor small business start-ups’ use of interstate crowdfunding that provides access to small investor equity security markets, up to $1 million annually. Now startup entrepreneurs will have the option to either use nation-wide, or in several states intra-state, crowdfunding as a way of attracting new small investor capital or to continue attracting rewards-based funding from consumer platforms like Kickstarter. In an effort to mitigate some risk through investor-protection oversight, equity security crowdfunding will be limited to existing brokerage firms or new SEC registered Internet funding portals. Whether funded by investors or backers, creating crowd-attracting marketing “buzz” is still the name of the global crowdfunding game, expected to generate $34.4 billion this year.

Week 4 Blog

In order to establish and maintain favorable marketing messaging that is both infectious and contagious, businesses looking for equity security or consumer-based crowdfunding, no different than individuals hoping to satisfy urgent personal financial needs through platforms like GoFundMe, must successfully execute the three following online marketing strategies well:

  • Found relationships on trust. Campaigns lead by founders who are rich in industry-specific expertise directly related to the campaign’s Big Idea have found start-up advantage because these founders better understand industry dynamics, know customer needs and have valuable established network connections. Trust develops beyond experience confidence through timely and transparent campaign communication, the willingness to encourage consumer feedback and adopt positive contributions as well as the ability to deliver backer rewards on-time.
  • Keep the Big Idea simple, visual and sharable. Just as new-generation What-You-See-Is-What-You Get (WYSIWYG) editors let computer users engage with design changes in real-time, What-So What (WSW) Big Idea message design builds relatable and sharable first impressions. The “What” component explains the campaign’s product or service while the “So What” explains why the message reader should care. For example, Kickstarter’s Initial 3Doodler’s $2.3 million campaign was described as “3Doodler: The World’s First 3D Printing Pen.” A Big Idea message encapsulates the campaign’s product or service through a phrase or sentence that expresses innovation, originality and ability to meet self-interest needs while igniting reader surprise, memorability and shareability-intention especially on broad social media platforms like Facebook or Twitter. The Big Idea should be the focal point of all communication efforts including an engaging, image-rich campaign landing page and campaign video.
  • Help opinion leaders talk-up the Big Idea. Use email to engage your Big Idea’s target community well before your campaign launch by connecting with community opinion leaders such as well-respected journalists, publishers, bloggers or technical industry experts or other respected consumer groups that can perform early product testing evaluations. The ability to engage and build favorable opinion leader interest will generate early earned media impressions that can be reinforced by the campaign’s launch.

Thanks for reading this week! Have you become a crowdfunding backer? Tell me what was it about the campaign that sparked your interest, caused you to share the project with others or convinced you to become a supporter, in the comments below.

To read more about Online Crowdfunding Trends

Ruth Simon writes about “Small Businesses Struggle to Tap ‘Crowd’ Funds

Chance Barnett writes about “Trends Show Crowdfunding To Surpass VC in 2016


About dleastep

This blog was created for coursework participation during WVU's Reed College of Media's Emerging Media and The Market Late Fall 2015 class. As a candidate for the Digital Marketing Communications (DMC) Graduate Certificate, which I am completing as continuing education for my Master of Science in Journalism (MSJ), I hope to better understand today's dynamic global media audience habits and engagement with brands, organizations and community. Please join the conversation with my fellow classmates as we explore emerging media effectiveness, its creative processes and impact on society ethics by commenting on my posts or linking to classmate blogs listed on the right of my blog-page.
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2 Responses to Three Marketing Strategies for Small Business Crowdfunding Campaign Success

  1. kdberg8 says:

    Hi Debbie!

    Crowdfunding is so interesting to me! It is something that can go really well for someone or really poorly, especially when it comes to businesses. It is something that is regulated heavily and interesting and really has to be earned based on good behavior. It almost feels like a bribe from a business perspective.

    I love the outline of the three ways to market the strategies discussed well. I think you really grasped these concepts and share the idea behind each thoroughly and in a very clear manner.

    As for myself, I am ok with crowdfunding but it really depends for what or who. I like it when it is for people in need or seen more like a charity (i.e. – helping a cancer patient pay medical bills, donating to a good cause, etc.) but if it is meant to support a business, if I am not a die hard supporter, I am totally against it. I think it could be viewed as a huge rip off in a sense and is taking advantage of others for their own well being. I guess that is my own opinion but that is just how I see it from a business perspective.

    Just some food for thought! Very interesting topic! I love this getting my brain working.

    – Kels


    • dleastep says:

      Hi Kels, thanks for sharing your thoughts on crowdfunding!

      In doing research for this post, I ran across several articles whose authors expressed similar concerns as you. Some were just expressing the fatigue from so many funding requests seeking their attention, many of which were not emergency personal situations but rather help requests for discretionary things like vacation and weddings. I like the concept of crowdfunding product development because it mirrors co-op funding practices that have historically helped build American rural infrastructure and support family farms. In the case of local co-op organizations, one has a chance to personally know others in the organization. With crowdfunding however, its hard to know enough to distinguish trustworthy efforts vs. those not likely to succeed due to negative business factors or worse, bad intentions. Because so many business start-ups fail for business reasons, I can’t imagine small investors being willing to absorb the risk of ownership, rather than invest those funds in mutual funds or other less-risky savings, now that the Fed intends to begin raising interest rates. As the use of online crowdfunding matures, it seems there is a growing group, who like you, approach it with an informed and healthy skepticism.


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