Running a successful Kickstarter campaign is every entrepreneur’s dream. Sure enough, every campaign manager wants to raise enough money to support their idea or prototype. For that, the project has to be successful.
But what determines this success? What’s the threshold that a project needs to meet? Is there a set standard for success, or is the bar arbitrary? All these questions and many others must pop into your head when you’re planning a campaign.
What is Success in Crowdfunding?
First things first, what is success? In simple words, it refers to the accomplishment of a purpose. However, when applied to crowdfunding, the definition has to be molded a bit.
Here’s the thing: meeting your project target isn’t the finish line – it’s the starting point. That’s where your business or art is taking a kick. You still have a long way to go, from bringing your prototype to life to marketing it and subsequently making sales.
Raising enough money to meet your target shouldn’t define a successful campaign. You’ve only made it as far as the start line. All this effort was to get a spot in the race. Now that you’ve qualified for the competition, how likely are you to touch the finish line?
That’s what actually determines success in a crowdfunding campaign. How likely are your backers to support you once the product comes out? How many of them will pre-order the book you’re writing?
They may have pledged enough money for you to get started, but how do you assure they’ll not give up on you later? Of course, the outcome mainly depends on you. But it shifts your focus from what success really means in crowdfunding.
For crowdfunding, we can expand the definition of success to ‘accomplishment of a purpose to pave way for the successive achievement of related aims.’ Makes sense? Well, it will, in a while.
Why Is It Important to Measure Success?
Why do you need to know if you’re running a successful Indiegogo campaign? What difference does it make? Think of it like cooking for the first time.
If you check the taste a few times during the process, you won’t have to be disappointed with the results. However, if you keep following the recipe without making necessary changes along the way, you’ll end up with something that’s going straight to the trash can.
It’s the same with crowdfunding. If you measure the campaign’s success along the way, you’ll notice things that need tweaking. You’ll see the areas where you need to work harder and things you need to change.
In this way, you’ll optimize the campaign, aiming it towards ultimate success. However, in most cases, the project magnitude does not allow manual managing. That’s when tools like JustEarlyBird come in handy as they manage your campaign while simultaneously boosting it.
Metrics to Measure Crowdfunding Success
Measuring your success manually can be quite vague, as the observations often don’t make sense on paper. That’s where success metrics help streamline everything. To make things easier, you can divide the success rate into:
- During the campaign
1. Success Metrics for Prelaunch
Right now, your campaign is still in infancy. You’re working on the project page, polishing it enough for it to make an impression once it’s live. However, that’s not the end of the prelaunch phase.
An important thing to consider during this phase is lead generation. Even before you get started, it’s useful to have a list of email addresses belonging to people who’re most likely to respond.
You can calculate the number of emails you need according to your campaign’s goals. Use the following formula to calculate the ideal number of email addresses for a successful launch:
(Funding Targets x 30%) / (Conversion Rate x Product Value)
Therefore, your early success is determined by the number of immediate hits you get as soon as the campaign goes live. The more leads you have in the early stages, the more successful your campaign is.
You can generate leads earlier in the campaign through one or more of these ways:
- Family and colleagues
- Press coverage
- Emails to relevant groups/people
If you have a dependable group of supportive people around you, count on them to give your campaign a kick.
Secondly, you can opt for press coverage. Unfortunately, media outlets hesitate to cover campaigns that haven’t been launched yet. However, if you have a considerable social media following, you can work around this.
Lastly, sending emails or getting in touch with relevant personnel can help in the prelaunch phase. For instance, if you’re running a charity campaign, email the philanthropists in your area. Target the posh parts of town and stick to a wealthier audience.
2. During the Campaign
The first two to three days will give you an idea about the future of your project. How well is your project doing as a budding prospect? Is it garnering enough attention?
Some experts say that your campaign should achieve up to 25% of the funding goal in the first two days. However, some projects stall after going up to 30%. So, the 25% mark isn’t a guarantee for success.
The second metric to measure crowdfunding success is conversion rates. Generally, conversion rates up to 10% are considered successful, but you don’t have to chase after a number. Instead, you should only focus on one thing: are the rates going higher?
It shouldn’t come as a surprise to you that rewards are a catalyst for crowdfunding success. People want to feel validated for pledging, and rewards help do that.
JustEarlyBird has an intuitive dashboard with some interesting features:
- You can see the last time a reward was adjusted or checked.
- The Action Log lets you check the performance of a particular reward.
- Besides telling you the stock count, the dashboard also lets you adjust the rewards. In doing so, you’re prompting the audience to take quick action.
That’s basically the whole crux of marketing your crowdfunding project. You show the audience a scarcity of rewards and they get a psychological urge to act quickly before the stock runs out.
As mentioned above, you need success metrics to determine when and where your campaign needs changes or upgrades.
For instance, if the conversion rates are low, go to the JustEarlyBird dashboard. Adjust the rewards – showing a scarcity – and check if that boosts the conversion.
Likewise, you can tweak other things along the way, such as the target audience for your Facebook ads. However, you have to be a bit careful while advertising. You shouldn’t be spending more money on the ads than they’re bringing in – as product sales.
3. Post-Campaign Metrics
Once you’ve reached the target amount, the race isn’t over. It has just begun. Now, you can start taking pre-order or selling tickets for your book launch or concert. Indiegogo has a built-in tool for this, called InDemand. It lets you accept pre-orders from your backers.
If you did everything right in the earlier steps, this shouldn’t be much of a problem. However, if the conversion rates, cost per acquisition for Facebook ads, and campaign page visits were lower earlier, you should expect the numbers to drop in this step.
Suppose you’re making a short film. People may have pledged $10 to support your project, but how many of them are willing to give another $30 to come and watch it? That’s where the real success lies.
Your crowdfunding campaign is only successful if the events following it favor your product or service. To ensure long-term support from your backers, you must give them good rewards.
Again, JustEarlyBird helps you do that. When it gets too overwhelming for you to manage the rewards manually, the automation tool takes over. Refreshing every minute, it ensures sufficient stock levels for the entire duration of the campaign.
Moreover, it allows you to adjust the rewards and view adjustments in real-time on the dashboard.
Success Metrics for Real Estate Crowdfunding
Since the principles for real estate crowdfunding are a bit different, the metrics differ too. Typically, the following metrics determine your project’s success:
- Number of investors
- Project to investor ratio
Firstly, the number of investors on a platform determines how successful your campaign will be. As most real estate platforms don’t have as many users as popular sites, it’s best to post your campaign on multiple platforms.
Secondly, the investor to project ratio should be high. In simple terms, a platform should have sufficient investors per project. In real estate crowdfunding, people are not pledging $20 to a project. Some sites have a minimum backing amount of $2000.
Thus, for your campaign to be successful, the platform should have enough investors to fund large projects.
Running a successful Kickstarter campaign is only possible if you track the success metrics as you move further. At any point in the project, if you think that something isn’t working out, change it immediately.
You only have 60 days to reach the target on most platforms. Use these days wisely, and don’t delay making tweaks along the way. If all the success metrics are showing positive growth, you’re golden.