There is a myth in crowdfunding that posting on a well-trafficked crowdfunding platform will guarantee success. After all, exposure is the second currency for crowdfunding and choosing the right platform for your project is important. Not just important but can decide your project success. However there is a flaw in this myth, it’s wrong.
The myth is based around more traffic means more donations, and at face value seems like a good assumption. The idea is that even if one person in every 10,000 people donate, you’ll become successfully funded if you just keep throwing people at it, I.E. The platform’s traffic. In some sense, absolutely, that’ll work but we’d argue that… a 0.0001% donation rate is… abysmal. The idea that having the most views is the way to success sounds like a solid plan but unfortunately, this doesn’t always work out that way.
See the myth is unfortunately flawed because it disregards modern marketing practices, namely target marketing. Getting 10,000 views on your project could look like a tempting deal but it brings to the table the same antics marketing firms will use to sell to you. Marketing comes down to human behavior and what humans do, just because you have 10,000 viewers doesn’t mean they’re going to be interested in your idea. This feeds back into the crowdfunding traffic myth, just because a platform has more traffic doesn’t mean that traffic will be interested in what you’re selling. It’s why you read so many crowdfunding articles about the importance of pre-crowdfunding. In fact, roughly half of all projects who do not conduct pre-marketing will not hit their funding goal, regardless of crowdfunding platform.
Take for example our platform, we’re always looking for new innovative projects. That said we’re only looking for people seeking to fund their awesome new inventions. So we have two approaches we could take, the push for everyone or define a target audience. We could reach out to a million people and see if they need funding without any conditions. What that may get us is 700,000 people who make more than 150,000 USD in a year, well… that doesn’t help us because in a study conducted by Art of the Kickstart only 20% of crowdfunding projects come from people earning more than 100,000 USD a year. So we only have a 1 in 5 chance of retaining someone above the 100,000 USD income bracket. When we look at the male to female ratios for crowdfunding, we also see a majority here as well. Men make up 64% of all crowdfunding projects, meaning that of our 700,000 user outreach finding people who would be interested in our platform, let alone crowdfunding AND be in the position to be crowdfunding, becomes slim. This is equivalent to if you placed your crowdfunding project on a hugely populated crowdfunding platform with no pre-marketing efforts.
Now, on the other hand, we could settle for a more targeted group of people, let’s say 100,000 people total. These people have been pre-filtered from our original 700,000 user group (if the 700k have varying incomes). Yet by filtering them we know that these 100,000 people are interested in crowdfunding, have income brackets below 100,000 USD a year with various interests in art, games, business etc. Even though we’ve reduced our pool of interested people by 600,000 we’ve increased our conversions because now we have a specific group of people that we know are interested in crowdfunding, aka what we’re doing. Remember how before we had a 1 to 5 ratio of retaining someone due to not filtering out in the 700,000 people example? By filtering by income level alone we’ve increased our ratio from 20% to 79.3% or roughly a 4 to 5 ratio.
This highlights the power of pre-marketing and launching on a platform based off what it will do for you instead of how populated the platform is. It’s ironic but at the end of the day, you’ll push more donations to your project from your social media accounts than people who traverse crowdfunding platforms for projects.
If we assume that traffic drives project success, then we’d raise the question why is it that some of the most trafficked platforms also have some of the worst success rates in crowdfunding? Shouldn’t these platforms have the best success rates? After all, their projects are being viewed by the most people in all of crowdfunding, yet the two top platforms have success rates of 11% and 40% respectfully. We naturally have to ask, why, especially when smaller niche platforms like Dreams.Build or Seed & Spark are able to obtain above 60% success rating for their projects. Why can we or Seed & Spark obtain a higher success rate? It’s simple, it’s all about directing highly targeted traffic to your project. It’s also about having the right tools to allow you to cater to your specific niche, this is what we and other niche platforms offer that larger platforms unfortunately lack.
So the next time you’re thinking of hosting a crowdfunding project think, “What can this platform do for me” and not “How popular is this platform” and as always, build the hype before your crowdfunding debut! Building the hype will let you know what your users want and what tactics you can use to help them get what they want. If you’re a digital project, try a crowdfunding platform that offers digital files, if you’re a hardware project try a platform that will let you show off your project in all its glory. Decide based off features and possibilities, not foot traffic.
That’s all for this post! We hope you enjoyed it and as always let us know what you think on social media!