Images_Digital_Edition_January_2020

www.images-magazine.com KB BUSINESS DEVELOPMENT JANUARY 2020 images 39 as peer-to-peer lending, this model creates a loan from a pool of investors, which must be paid back with interest in monthly instalments. The best-known platform for this is Funding Circle. ■ The donation model This type of crowdfunding relies on supporters donating to a cause and getting nothing in return. JustGiving is the best-known platform for this type of crowdfunding. Choosing the rewards Most reward-based crowdfunding campaigns run for 30-60 days, and users can choose between the ‘all or nothing’ model and the ‘keep it all’ model. The ‘all or nothing’ model requires a target and a time limit to reach it – if the target isn’t reached during that period, then the campaign doesn’t raise any funds at all. The ‘keep it all’ model means that users can keep whatever funds are raised, but they must also deliver the promised rewards. Added benefits According to Tim Wright, a crowdfunding campaign offers three additional types of reward, aside from the financial benefits. He explains: “A crowdfunding campaign provides priceless insight – it gives a valuable understanding of price point as well as market validation, so you can quickly see if a project is worth doing. A campaign can also raise awareness and boost your marketing efforts. Finally, crowdfunding can help to establish networks of suppliers and distribution models, which can improve the path to market. It’s common for more sophisticated and experienced crowdfunders to launch campaigns just to benefit from these three elements. They want to speak to their customer demographic, so they use the campaign as a sales tool.” Holly agrees that their campaign opened up lots of unexpected opportunities. She says: “It gave the whole project a huge buzz of excitement and, as the crowdfunding pledgers came to our launch party, we got to meet a lot of new creatives who wanted to be involved in one way or another.” Planning your campaign “Crowdfunding works best when businesses already have an established network and a decent number of loyal customers,” says Steve Duttine. He adds: “Often companies reach 100% of their target in the first few days as much of the hard work is done in advance.” If you’re thinking of launching your own crowdfunding campaign, there are a few things to consider before you start. “Think about targeting, auditing, methodology and planning (TAMP),” advises Tim Wright. ■ Target “First, think about your target – what do you want to get out of your campaign? ■ Audit Secondly, undertake an audit of your existing assets and skills to work out if you have everything in place to help you reach your target. If you already have a strong online presence, good social media and healthy levels of engagement, these all stand to your advantage. If there are any gaps, work on closing them. ■ Methodology Next, decide on your methodology. Which model of crowdfunding would be the best fit? ■ Planning Finally, move on to planning and preparation. This can go on for an extended period, so be honest about whether you have the time and confidence to proceed. If you’re already struggling to manage your workload, or the thought of asking people for money scares you, then crowdfunding probably isn’t the right fit for your business.” Holly admits that the 3rd Rail Print Space campaign took time to develop. She comments: “First we created all the promotional material, visuals and brand identity so we would instantly become recognisable. Then we brainstormed all the different rewards we could offer, before promoting through all the channels we knew, including Facebook, Instagram and Twitter. As we also have our more commercial company, 3rd Rail Clothing, we already had a client list of creatives in the industry, which allowed us to spread the word much quicker.” Not-so-easy money There’s no doubt that a successful crowdfunding campaign is a great way to raise funds and open up new opportunities for your business. “Once the campaign was finished, we only had to wait 14 days for the funds to clear,” adds Holly. But Steve Duttine adds a word of caution for anyone considering launching a new campaign. “For me, the key takeaway is that crowdfunding isn’t a magic money pit. One of the most common misconceptions is that crowdfunding is easy. It’s not. It’s hard work and demanding – but the rewards can be fantastic.” www.3rdrailprintspace.co.uk www.twintangibles.co.uk www.tribefirst.co.uk Holly Clarke, studio manager, 3rd Rail Print Space TimWright, director, Twintangibles Steve Duttine, managing director, TribeFirst Steve Duttine, managing director of crowdfunding support agency TribeFirst, says that the key to success is keeping the entry point for rewards fairly low. He explains: “As a price point, £20 to £200 sells best. If you go lower than that you have to convert a lot of people to meet your target. If you go then higher, it becomes a more considered purchase.” Holly explains that 3rd Rail opted for an ‘all or nothing’ rewards model for their campaign, with perks including printing workshops, deals on monthly memberships and exclusive T-shirt and print collaborations. She says: “We decided to have a mix of small pledges and large pledges based on a reward basis. This included tickets to our launch party, which allowed our supporters to visit the space for the party, pick up a limited-edition tote and potentially sign up for a membership.” She adds: “There was a risk of not raising the full amount in time, so all our effort would have been wasted. It was a stressful four weeks.”