3 Common Crowdfunding Mistakes

While everyone hopes their Kickstarter or Indiegogo project is a success, in reality, many more projects fail than hit their goal. Even those who do hit their goal often find they can’t deliver their product to their backers. Fortunately, learning from other crowdfunding project creators’ mistakes can help prevent you from running into your own problems, and help make your campaign as successful as possible.

Below are some common mistakes to watch out for.

Kickstarter and Indiegogo Mistakes to Avoid

Not spending enough time on pre-launch marketing.

We’ve talked a lot on the podcast recently about how critical it is to spend enough time spreading the word about your project before you launch. In fact, the importance of pre-launch really cannot be emphasized enough. Before you launch, you’ll want to collect leads, or email addresses of those who may be interested in backing your product. To figure out how many leads you’ll need to collect in order to hit your funding goal, you’ll need to figure out during pre-launch how many people open their emails and click on the links to get a gauge for how many visitors you can drive from your email marketing during the live campaign. You don’t need to collect enough leads to fully fund just through your email list, but you’ll want enough to get yourself off to a good start on the first day of your project launch.

To collect these leads, you’ll need a landing page, or a one-page website that describes your product in detail and makes visitors want to learn more. Entice them to give you their email address by offering a chance to win the product by entering their information. Then, use organic social media, Facebook Ads, personal outreach and other tactics to get your landing page in front of the right people in order to gather leads.

Make sure you devote enough time to this – 3-4 weeks is typically a good start, though if you’re struggling to collect enough leads you may need to push this out further.

Not calculating your margins correctly when setting a funding goal.

When it comes time to set your funding goal, make sure you are considering all the important factors. Of course, your funding goal should take into consideration all the funds you’ll need to bring your project to life, but what does this really include?

Be sure to think about:

  • Minimum order quantities – how many units will you need to sell through pre-orders?
  • Manufacturing costs, including all costs associated with fulfillment
  • Marketing costs, including fees and commissions payable to any agencies you work with, as well as advertising costs, videography and photography costs and more
  • Platform fees, including payment processing fees
  • Shipping costs, if they are not included in your rewards

Generally, lower funding goals are better because potential backers tend to have more trust in projects that have already hit their funding goal. In other words, once you hit your goal you’ll likely see an influx of backers. However, you also need to be able to fulfill your rewards, so don’t set your goal so low that if you won’t be able to fulfill them unless you raise significantly more than your goal.

Not giving yourself wiggle room when determining shipping dates.

Unfortunately, one of the biggest issues that serial crowdfunding backers have with Kickstarter and Indiegogo projects these days is not receiving rewards on time. Many project creators seem to set their shipping dates based on a “best-case scenario,” but then they far exceed their funding goal and can’t produce enough products in time, or they run into manufacturing problems overseas and have to start the manufacturing process over again, and suddenly shipping is on a one-, two- or even three-year delay.

When calculating your shipping dates, keep an eye out for things that could go wrong in the manufacturing and fulfillment process, and build in some extra room to handle these issues. Backers would much rather receive their rewards earlier than expected, than spend a year wondering where their reward is or if they’ll ever see the product they paid for.

If you do run into shipping delays, be sure to keep communication with your backers frequent and honest. Let them know that you are experiencing delays, why the delays are happening and what you are doing about it. With Kickstarter scams becoming increasingly frequent, backers need to be able to trust crowdfunding project creators, and regular communication makes a big difference.

For more tips on how to have a successful Kickstarter or Indiegogo project and avoid some of the most common mistakes crowdfunders make, tune in to our podcast or subscribe to our newsletter.

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