Today, I’ll be going over 4 crowdfunding pitfalls you need to avoid. For those that don’t know what crowdfunding is, I’ll explain. Crowdfunding is the practice of raising funds for projects, charity, events, or personal needs. Kickstarter, GoFundMe, and IndieGogo are just a few of the websites that folks use to raise their needed funds. As a musician, crowdfunding may primarily be used for touring or a new album lunch. Fundraising is crucial for musicians that may have the fans, but not the financial support to jumpstart a new project.
The art of raising funds definitely makes musicians nervous. Musicians might question their worth or are afraid to look shady. But the truth is – you bring value to this world because of your music, and fundraising isn’t shady. It’s a trusted practice by many businesses. It CAN be shady, though, if you’re not ethical and honest with how you fundraise and how you manage the funds. Deliberate shadiness is a sure fire way to ruin your credibility.
So, here are 4 major crowdfunding pitfalls to avoid and ensure you put your best foot forward.
Pitfall #1: Setting unrealistic goals.
Part of setting realistic goals is planning. If you’re recording an album, write down a comprehensive list of everything that it will cost you. This includes anything from paying your producer, someone to master your mix, a graphic designer for all your designs (including album, social, and marketing materials), shipping costs, distributor fees, marketing expenses, advertising, PR costs, merchandise material you’d like to have on hand for bundles, any sort of video production, etcetera. Leave no stone unturned when you’re crafting a number.
As you’re thinking about costs, do your research. Don’t just guess, because you may under reach and not have enough funds; or, you might be asking for too much.
So, set realistic goals by crafting a comprehensive list with realistic research. Do one project at a time versus an entire budget for all your projects. This way you can streamline communication with your fans, while also managing your strategies more clearly.
Pitfall #2: You don’t communicate backers or potential backers.
One way folks may be perceived as shady is not communicating well. Use crowdfunding as an opportunity to continue telling your story as a musician. When people buy something, often times it’s not just about what they buy, but the why behind the project that provokes someone to buy. So, share what your hoping to accomplish, why it’s important to you, and what you think your fans would enjoy it. This is an excellent way to get the conversation going between you and your fans, and hopefully your fans and their friends.
Logistically, fans should be in the know with how you’re using the funds and the timeline for the project. Give frequent updates on how progress is moving along, while also thanking your backers for their support.
And before you even launch your crowdfunding campaign, make sure to build buzz around it at least one or two months before so you can build support. Having support from your super fans on social is a great way to build trust with potential fans.
Pitfall #3: You’ve got crappy perks.
Research is crucial to a successful crowdfunding campaign. Make sure to research campaigns that are similar to yours. Take notice of the different perks they offer. Why might one be more popular than the other? What could improve the perk in your context? You could even ask forums and groups related to your niche for ideas. You might even ask your fans directly what they’d like most and toss it to a vote on social.
You don’t want to overwhelm your fans with a boatload of perks either. Keep it to 3-4. You also want to consider your own budget and how much merchandise you have on hand!
Pitfall #4: You miss the marketing opportunities.
It’s tempting to just create a crowdfunding campaign, toss up a social post and hope for divine discovery by thousands of flocking fans. But this isn’t the case for any DIY musician. You gotta do the work. And this kind of work requires research, strategy and implementation.
If you have little to no fanbase, crowdfunding will be a challenge. You might get a few friends and family supporting you, but you need to start growing your fanbase and generate interest. Otherwise, with no marketing campaign there’s no momentum or meaningful progress.