Equity crowdfunding as a marketing tool

equity crowdfunding marketing

Learning to regard equity crowdfunding as a marketing tool is the secret to to maximizing profit from what is commonly considered "only" a financial tool.

The primary reason for a company to start a crowdfunding campaign is usually the need for capital, that's natural. Raising capital is the most obvious, tangible result of this path, but it is only the tip of the iceberg.

This is evidenced by the fact that, as the latest Polytechnic report on crowdinvesting points out, even large enterprises are beginning to take an interest in crowdfunding. Those are companies that do not need capital and, if they do, normally turn to the banking channel without any problems. But crowdfunding can provide them with something that banks can never offer: an integrated marketing tool. The chance to directly connect with their target audience, to create a community, to take root in a territory, to strengthen their image.

Consider how valuable the opportunity is for smaller businesses, startups, and SMEs that have fewer resources to invest in marketing. With a single tool, they can both do marketing and raise capital.

Marketing strategies for crowdfunding and through crowdfunding

A crowdfunding campaign is itself a marketing campaign. This has a double meaning:

  • doing a crowdfunding campaign requires marketing actions aimed at "selling" the company itself, that is, its shares, as if it were a product;

  • doing a crowdfunding campaign is a marketing action that promotes the brand and its product/service.

For this reason, when estimating the costs of a crowdfunding campaign, a substantial budget should be devoted to marketing: these resources should not be thought of as aimed only at closing the campaign successfully, but rather as long-term marketing investments for the enterprise as a whole.

Doing an equity crowdfunding campaign, in fact, means exposing yourself like few other occasions: to convince people to join, as real equity partners, a company, it is necessary to lay bare its conceptual identity, its economic balance sheet, its values, its prospects, its team, its medium- and long-term goals. It means to showcase yourself in an overbearing way, to advertise aggressively in the most positive sense possible.

It is inevitable, then, that the repercussions of such totalizing marketing actions fall not only on the contingent event, that is, the crowdfunding campaign, but also on the company at large. Showcasing yourself means seeking-and, if you do things right, gaining-visibility.

A startup that is just entering the market, still half-unknown, with few or zero customers, can thus begin to "be there," get its name out there and tie it to the need met by its product or service. While, through the same actions, it raises capital to finance its own growth and thus trigger a virtuous circle.

Doing all this takes time. That is why a good crowdfunding marketing strategy begins long before the campaign, in the planning and precrowd stages. The key points of a thorough marketing strategy are as follows:

  • identifying the right target audience
  • defining the ideal channels to reach the target audience
  • Preparation of a rich editorial plan for the chosen channels
  • definition of communicative style
  • Building an ideal path (funnel) for users
  • Preparation of the necessary software tools to take care of the relationship with users (e.g., CRM)
  • Creating opportunities to interact with potential investors (live webinars, events, etc.)
  • online advertising
  • taking care of media relations
  • Preparation of a plan for monitoring the effectiveness of the strategy.

Want to learn more directly with our crowdfunding experts about the topic you are reading about?

Turbo Crowd can reveal to you all the tricks of the crowdfunding trade, explain the capital-raising opportunities available to you, and provide you with practical support to carry out a successful crowdfunding campaign.

The right target audience for effective marketing

What does it mean to "get it right"? To achieve this double marketing effect, it is not enough to generically sponsor your equity crowdfunding campaign to the hilt. It wouldn't even be enough to just bring it to a successful conclusion, but that's another topic we covered in more detail in another article.

Equity crowdfunding as a marketing tool works if you address the right target audience. 

"But marketing for the campaign targets potential investors, marketing for the company's product/service targets potential customers!"

Wrong.

It is an all too common mistake of companies starting an equity crowdfunding campaign to think that the target audience of the campaign is different from that of selling their product or service.

There is only one target audience: that of customers or potential customers. It is the people who have an interest in the product or service who are the first ones who may have an interest in contributing to the prosperity of the company that makes it. The gain that can be offered to them, in fact, is twofold: the future profit that comes from the investment itself and variously privileged access to those products or services that they would buy in any case.

By managing marketing for the campaign in this way, the gain for the company is also twofold: it gets both the capital it needs to grow and new customers and the increased retention of old ones.

Examples of marketing strategies for crowdfunding

Let's look at a few examples of how, in practice, equity crowdfunding can become a marketing tool for itself and the company.

The marketing toolbox includes not only the creation of an editorial plan for social media, which also should not be lacking. No magic wand, but some communication channels and vehicles that are now part of the must-have standard:

  • social media;
  • newsletter;
  • webinars and other useful and free content;
  • online advertising;
  • reward;
  • online and offline events;
  • ...

For all these tools, it is crucial to set up the right target audience we talked about in the previous paragraph and adopt the communication style consistent with it. But that's not all: in order to get the maximum effect from marketing actions, it is important to do deep and comprehensive communication, provide clear and extensive information about the company, crowdfunding in general, and finally about the equity crowdfunding campaign in progress.

In order to create a lasting and heartfelt relationship with potential customers and investors, moreover, one must be committed to providing them with genuinely useful content and not merely advertising, and to "putting one's face out there." That is, communicate through team members in the first person, with first and last name, and where possible meet your audience live.

Physical events are most useful for projects that are strongly linked to a specific area, where a community can be created that is united by shared values and interests. However, the concepts of "community" and "niche" are also valid regardless of physical proximity and can also be leveraged online to become valuable pools of loyal customers well beyond the equity crowdfunding campaign.

Please note: in order to maintain the long-term effect, it is imperative to remember the contacts reached through the crowdfunding campaign even after the campaign has closed! This means continuing to communicate through all channels, keeping them updated on company activities, reserving special treatment.

The last item on the (non-exhaustive) list is reward, which is a "prize". It is nothing more than "variously privileged access to those products or services that you would buy anyway," which we have discussed as leverage for turning customers and potential customers into investors.

Le possibili declinazioni del reward sono infinite. Per scoprirle, imparare a inventarle e usare l’equity crowdfunding come strumento di marketing, leggi il libro di Turbo Crowd! Troverai questo e tutti gli altri segreti indispensabili per sfruttare al massimo il crowdfunding in tutte le sue potenzialità.

Do you need support in preparing a successful crowdfunding campaign and seeking potential investors for your project?

Turbo Crowd can accompany you throughout the process, from organizing the precrowd to closing the collection, developing effective and innovative marketing strategies to best promote your campaign.

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