- Withdrawing funds is usually a straight-forward process
- Keep records for Regulatory and Audit purposes and also for Marketing
- The campaign data can be as valuable as the money you raise
- Communication is critical during the fulfilment process
- Keep Your Backers in the Loop
- After achieving funding goals, work is not over, you need to build on your success
Having hit your funding target, thanks to a successful crowdfunding campaign built on lots of good preparation, a compelling video, a strong promotion and a savvy campaign page you now have to begin the real work of making everything happen. Once the buzz of your successful campaign fades, you’ll quickly realise you are accountable to hundreds, if not thousands of contributors. It’s what you do AFTER you have hit your funding target that really determines the future of your product or service…
How to get the Money
Withdrawing funds from the platform is usually a very simple and straight-forward process. With loan, equity and invoice trading platforms the legalities of the process are usually facilitated by the platform. For other forms of crowdfunding, depending on the platform, withdrawal can either occur once the campaign duration is reached and has hit its funding goal (all or nothing arrangement) or else as soon as financial contributions are made.
Most campaign platforms provide the interface to transfer funds to any other payment system such as PayPal, WePay etc. or even an electronic bank transfer to your business account. Transferring and withdrawing funds is a straight forward process and usually takes from 7 to 14 days depending on the platform you use. A standard verification process is normally applied before withdrawing of funds can take place.
Most crowdfunding platforms also provide very intuitive dashboards that provide detailed information about each withdrawal. The online dashboard displays the progress of the campaign and withdrawing money will not affect the displayed campaign totals.
Most campaign platforms offer integrated back-end management tools that allow the campaign owner to store data related to the campaign. This data is normally accessible through a series of menus and presented in different formats, with different levels of detail. Accurate and up-to-date data is critical for the proper running of a crowdfunding project.
Part of the crowdfunding campaign entails keeping record about the donors, their donation, the period and frequency. Most of the data is captured automatically at donor stage and stored in the respective campaign platform.
Campaign platforms offer integrated analytics related to CRM (Customer Relationship Management) data, traffic and usage patterns, donation levels and social media traffic. Campaign platforms offer user friendly and graphical dashboards that present the different data subjects in a single interface in real-time. Analytics allow the campaign owner to drill into specific data such as audience information, locations, conversions, referrals, etc.
Do not underestimate the value of the data and feedback that you can glean from a crowdfunding campaign. Regardless of the success or failure of the funding campaign, the feedback you receive can provide you with great insight into how the market has perceived your product or service offering.
When a reward based campaign is successfully funded, the owner of the campaign is responsible for completing the project and fulfilling each reward. Their fundamental obligation to donors is to finish all the work that was promised. As part of the ‘Stay Connected’ process, it is very important that the owners of the campaign regularly update the donors about the progress of the project and the status of the fulfilment programme.
The Reward fulfilment process is a very important task within the campaign and must be included in the project budget and schedule.
The following 3 steps give an indication on how the reward fulfilment is normally conducted in the process of the campaign:
- The reward fulfilment should be included in the project plan, establishing a detailed and accurate budget and timescale. The plan should also include contingency planning and a risk assessment.
Unfortunately, the cost of reward fulfilment is something that is often under-estimated and in some cases, projects have failed because the campaign owner was not able to capture all the components of the reward at the very early stages of the project. On the other side, if the correct budget and planning has been factored in, reward fulfilment becomes very straight forward and can be very valuable in attracting early adopters and provide positive feedback on the product and your company.
- Failing to fulfil rewards on time could tarnish the reputation of both the project and the company (or individual). Communication is critical during the fulfilment process to ensure that funders don’t panic and misunderstand any blips or delays. On average Crowdfunding projects miss their delivery date for perks, product or service launch by about 90 days so for the experienced Crowdfunding investor this is ‘normal’, but without a steady flow of information your financial backers can and will become anxious, which not only will cause you to have to spend valuable management time on explaining the ‘whys’ and ‘whens’ but will also begin to alienate those whom have already pledged support to you from doing so in possible future funding rounds.
- If you need help, some of the effort can be outsourced to companies that can coordinate the crowdfunding fulfilment programme, taking into account different products for different donor levels and segmenting the inventory and outbound shipments based on specific target dates and concurrent donation periods.
If you are absolutely unable to complete the project and fulfil rewards, you must make every reasonable effort to find another way of bringing the project to a satisfying conclusion for your donors.
In most of the cases, the crowdfunding platform will not bear any responsibility neither on the completion of the project nor on the reward fulfilment. Furthermore, the crowdfunding platform, does not oversee the project’s performance, and does not mediate disputes between users. These provisions are normally indicated in the ‘Terms and Conditions’ of the crowdfunding website.
Stay focused on the Product or Service you have developed
During your funding campaign it is likely that you will have had to answer many questions and queries about what you are trying to develop and the route you are taking. In many cases this will challenge the assumptions you have made causing new ideas to ferment in your mind and causing you to worry that some of your delivery strategy may need changing.
This is dangerous because time is limited in terms of moving from concept to delivery. Ensure that you document all the feedback that you have received but at the same time be honest with yourself about how much time and effort would be necessary to incorporate these new ideas into your core concept and the impact this would have on your timeline and costs.
Any changes will inevitably affect your original project plan so only add those ‘must have’ additions and leave the ‘nice to haves’ to future products and future funding applications. Being brutal with this decision making process will help keep you on track to deliver to time and budget.
Your main objective should be to keep your promises made to your backers.
From that point on, when you have begun to receive customer feedback you can possibly begin to think about improvements and variations on your original concept and develop plans for a portfolio of products that will develop your market position and increase your chances of long term business viability.
Keep Your Investors informed
To varying levels, your investors have shared your vision for your business concept and supported your venture with their cash. They are now passengers on the same journey that you are now undertaking and therefore like any journey want to be kept informed about when they will arrive and more importantly, where.
Your communication plan is a key feature of the post funding phase, because without this, dissatisfaction rises. It is not necessary to create a blog that details every issue that you face, but assuming that you have defined key milestones within your delivery plan, you may need to share any significant missed points with your investors. Effective communication will reassure investors that you are a capable manager of a new business venture that they have pledged their support to.
Plan Ahead for Customer Support and things that could go wrong
In an ideal world everything will go to plan and you will deliver to cost, time and quality with perfect customer satisfaction levels. The reality is likely to be different, as any start up entrepreneur is likely to testify. Any slight hiccup in your development journey will inevitably add pressure to your small management team and cause increased pressure and possibly increased cost.
Trying to plan for the unexpected is by definition difficult but ensure that your original plan is not built upon everything going right first time. Putting realistic timescales into your development and delivery plan is vital right from the start.
The most critical activity here is building an efficient customer service strategy that breaks your support efforts into web support, customer service and resolving issues. Make sure that your website is easy to find on search engines and has documentation, FAQs, photos and videos on how to use the product or service ahead of the launch and how to report problems back to you. You will need to ensure that you answer any query quickly and effectively.
If you have the luxury of a customer service team ensure that they understand how best to help customers in the manner that reflects your business values.
Having recorded customer issues ensure that your customer base is kept up to date with changes and communicate any fixes to users via updates and your customer service team.
Your backers will expect a few bugs and problems as you develop your business, it is not something to be embarrassed about unless their severity and quantity become unreasonable. Being able to resolve problems quickly, effectively and efficiently can actually raise customer confidence in a new venture as they see how you have overcome issues on your journey to a successful launch.
Think about future funding needs and new products or ideas
Your ability to cultivate a second income stream quickly after launch could be the difference between the development of a thriving business and a single product venture that vanished as quickly as it arrived.
Most crowdfunded start-ups reach a point when your initial funds run low, which typically happens just before or just after your launch, when the business is at its most vulnerable point of development. You may need to identify additional revenue sources that will help you obtain new orders after launch. If you offer hardware and media perks, consider selling direct on your website and on other online stores. If you developed software, try to regenerate the buzz from your campaign and drive sales on your site.
Communication is the life blood of business – it’s how we generate interest, attract customers and deliver satisfaction to the marketplace. It’s also how through feedback from both customers and potential customers we generate improved products and services and gain valuable information for the development of new market opportunities.
Make a plan. Communicate often and communicate well. Rather than randomly select ideas as they occur try to brainstorm those areas that are likely to fit in with your campaign and write them down with a timescale so that you know how you will engage with your (potential) customer base and have a structure to your forthcoming promotional activities. Once you have a plan you can then modify as events happen and change your ideas, but without some form of structure you will fail to maximise the effort you put in.
Don’t forget to follow these basic steps:
1) Express gratitude to all backers and give special thanks to those who contributed beyond the requested amount
2) Spread updates among backers about the project progress
3) Keep on promoting and taking orders
4) Enlarge and develop your contact network
5) Think about follow on actions (maybe another campaign?)