Crowdfunding campaigns have become increasingly data driven in recent months. The game is changing from one where hopeful creators can get their project off the ground, to one where slick marketers are running serial campaigns on precision ad targeting. Guest writer CHRONOGUY shines some light on the techniques being employed by master crowdfunders.
The Data Driven Campaign
In the past two years, crowdfunded watch campaigns have gotten bigger, bigger, and bigger. Many of the successful campaigns can yield $200k to over a million dollars in pledges. Often, I see the comment, “How did that [expletive] watch raise so much capital?” Surely, I’d agree with most assessments that some of those watches are not that attractive. Some in the watch community cannot fathom the ridiculous high pledges. It is almost unfathomable. Bottom line, those guys know how to run a better campaign. The old adage holds true, “Don’t hate the player, hate the game.” Crowdfunding campaigns have grown in sophistication that some players have become “serial” campaigners. With a proven track record, they often run a second, third, fourth and even fifth campaigns with each one getting bigger than the last. They’ve learned from their past mistakes and successes. These campaigns are highly data-driven and I’ve had access to some of this information through various sources. There are common strategies employed and I’m going to share what I know without revealing any proprietary, privileged information. Successful campaign often follow a formula. You can call this a general guideline or blueprint.
First of all, good campaigns have long well thought out pre-launch phase. Or “pre-launch” marketing. Some suggest 30-45 days of prelaunch marketing and preparation. I’ve seen longer. Some campaigns have 6 to 9 months of advance pre-launch. During this time, they can put their house in order; create a little buzz. They also build a rapport with potential backers. Many crowd-funded experts tell me that building a bond with your customers is instrumental. They often become your most vocal backers. With good rapport, they spread the word for you. Some campaigners start out with joining multiple groups, forums to “test the waters” by showing prototype pictures. They elicit response of a design or direction. They may ask, “What do you think about the packaging for our watch?” or they post pictures of watches on wrists of fans in different lifestyle settings. This helps build a bond.
While this is happening, the nuts-and-bolts are put into place. Marketing and customer acquisition. Landing pages and and email subscriptions are created. The purpose of this is to build a potential list of backers early in the game. The iPhone line analogy is routinely cited as an example. On your launch day, you want a long line of potential customers waiting before the doors open. In order to do that, you need an email list. If you don’t have a list, you need to create it. Many opt for Shopify for the landing page and MailChimp for email lists. Fancy designer themes can be purchased on themeforest.com. Out of curiosity, I was able to create a full functioning landing page using WordPress, WooCommerce, and MailChimp in less than a day. I registered for a cheap $17 domain from Domain-Maniac, a $50 theme from ThemeForest and I was done in a few hours. The bulk of the work was setting up the mailing list. If these are skills you do not possesses, you can always find freelancers.
Speaking of freelancers, you will need outside help. You may not want to share your business model and secrets to an unknown stranger but one of the things you should do is a hire a VA (Virtual Assistant) to do some grunt work for you. VAs can be relatively cheap and I know some campaigners who use freelance sites to hire english speaking VAs from countries such as the Philippines and Indonesia at reduced rates. It sounds like travesty but some of these guys will pay $3 an hour to an offshore VA. Some of these campaigns also hire shills from sites like Fiverr to promote on various forums and facebook groups. I should note shills are distinctly different than VAs. VAs will do grunt work for you like research like gathering a list of Instagram influencers, blog contact information, to studying similar campaigns. They’re given explicit instructions like gather a list of 100 top influencers in a niche. If you have a military style watch, their task may be to find the contacts of youtube vloggers and bloggers who handle are into EDC (Every Day Gear), and tactical knives. VAs also backtrack where other campaigns have successfully gotten postings. VAs can also handle day to day social media responses like Instagram automation of likes and comments. Instagram influencers often use VAs as a preference over computer bot automation.
There are lots of tactics to consider. Lots of campaigns will tell you they rely on a specific strategy. It all sounds good but may not necessarily translate well for your product. For example, I’ve seen campaigns rely strictly on Instagram as they want to follow the example of MVMT watches. In various instances, sole reliance on Instagram, I’ve seen those campaigns flop or they didn’t reach their potential. Others will recommend a Facebook Ad only approach. Again, this may not work for everyone. However, having said that, a majority of the high pledge campaigns have stated that 70-80% of their marketing was in Facebook ad buys. I also believe FB ad buys are the most effective but I also believe in multiple prongs of attack. You should consider all avenues of social media and traditional internet marketing.
A lot of this is beginning to sound like a lot of work. It is! For most campaigners, it is basically a non-stop full time job. Thus, the strong pre-launch preparation is mandatory. The longer and better prepared, the more likelihood you will be successful. I can’t stress enough the importance of a strong pre-launch. The golden rule is to have 30% of your funding secured before launch day. That is what I’ve been told by various parties in the game. You need to secure that to have any traction or momentum. So the objective of prelaunch is to get that list of backers to buy on day one.
Building the List of potential backers and Incentives
As mentioned earlier, a landing page and email list are paramount. The larger the list, the longer your “iPhone-like” waiting line will be. Without citing any specific campaign, one of the most successful KS campaign generated a list of 5,000 potential backers in a 2 week sprint. They spent around $7,000 in FB ads running $5 ad campaigns across 30 unique regions. These are micro, highly targeted ads. All in total, they had 420 total ads during the total 2 week sprint. They tested various ads and changed daily. Better performing ads were allotted more resources. Like other similar watch campaigns, certain trends started to appear. They notice a high response rates from certain regions they took for granted. Several watch kickstarter campaigns have noted that a large portion of their backers came from Singapore. In some cases, 30%. This makes sense as the demographics are often tech savvy millennials who spend a larger portion of their earnings on luxury goods. This example may not apply to your watch but the lesson here is clear. Test, run multiple small ads and verify. The campaign in question raised $40K in 34 minutes and over $100k in a day. Now, it would be simplistic to assume this was all the result of Facebook advertising.
I would recommend experimenting with facebook ad buys. It is fairly inexpensive to test the waters and can be low as $5 a run. Imagine a campaigning running $200 a day ads at $5 a piece, that is 40 highly specific ads. The rule of thumb is to be very specific. Your audience profile for a single ad should be as small as 10,000. There are different types of ads you can run from post boostings to clicked ads. There are a lot of jargon to familiarize yourself with CPC (cost per click) or CPM (cost per thousand impressions). Without getting to the advantages of either one, most opt for CPC to get sign-ups where as CPM is tailored more brand building.
Some of the top million dollar campaigns use agencies without high retainer rates and extremely expensive ad buys as much as a $1,000 a day. I wouldn’t be too discouraged as it is possible to be more judicious and cost effective in your approach. You simply need to test and verify. If you have a 5 month pre-launch, you can test different methods to see how that list is building. The mistake I see is people doing this a week before or during the launch as they scramble.
There is another campaign that employed another strategy to consider. In addition to the obvious FB ad buys,this second campaigned used Facebook “Events” and Twitter shout-outs using a service called Thunderclap. This was a “save-the-date” metaphor to remind potential people on the list of an impending launch. Having a date brought a sense of urgency. This campaign was the “Blocks” modular smartwatch which raised 1.6 million. Thunderclap cost around $500 to start off with but there also competing, cheap, low cost alternatives out there.
Now creating that list sounds easy on paper but it requires work. Some have opted for give-away. One campaign in question gave me their high numbers but in the end, it didn’t make it. Personally, I don’t think contests works unless you plan to give away lots of watches. Reasoning is simple, those people are not necessarily buyers. They just want something for free. To get real buyers, you need to “incentivize.” 30,40,70% discount off an inflated MSRP can only get you so far. We all know that $200 quartz watch will never retail for the $500 MSRP. Hefty early bird rewards are great but some potential backers will come out dissatisfied if they missed out. Thus, it has been suggested that campaigns also use affiliate and referral incentives. Refer 5 friends, get 5% off. Refer 25 friends who actually back, get a free watch. Here, you are basically letting your customers do the selling for you. In many instances, this also the work-around for those missed early bird rewards. There are a few companies that can help you with incentives and affiliate. They include kickbooster and others.
Once a potential customer discovers you, you need to close the sale. In internet marketing, the method to do is called “retargeting.” In short, you advertise the heck out of them until they purchase or sign-up. There are ad-networks that support retargeting. Once the visit your site and view a particular product, lets say a chronograph, you push ads to them on your ad network as reminders. So if they leave your site, you nag them them on other sites. Again, if these are strange concepts to grasps, there are countless examples to research. To condense all of this in a single guide would be too much to digest in one sitting. Several KS watch campaigns retarget on a daily basis and the lay person would not know. In a way, it is almost subliminal.
Conclusion / Part 2
There is a lot more to cover. Instagram influencers, Blogger outreach, building social proof. More importantly, where to get cheap help and specific things to do. So I will end it here as a teaser. If you learned anything from this post, it should be the fact that you should have a well prepared pre-launch game plan.