Crowdfunding is usually associated with charitable organizations in need of funding and startups seeking capital. But let’s not forget about the well-established brands. They’re getting in on the action as well, but the motivation isn’t just about the money, it’s something far more important. Branding, testing new products and engaging their customers are the real reasons that even the biggest name brands have delved into the world of crowdfunding.
Brands that move towards Crowdfunding with a strong consideration of social impact, or just good ole fashion common sense, will move ahead of their competitors. But the sentiment behind the crowdfunding campaign has to be legit. No BS. Consumers have serious BS meters.
Here are some ways that major brands can benefit from Crowdfunding and begin to really understand how they can engage from a social impact perspective.
Branding
Anytime consumers see a brand name that they know and trust, it further cements the bond between the brand and the consumer. Building a brand relies on customer trust. The brand has to instill trust. Consumers want to associate with brands that are trustworthy. Consistency is the key and the company logo has to be prominent and repetitive. Brand recognition and brand loyalty are two ways that crowdfunding can help to raise brand awareness, engage customers and build brand goodwill.
Test Marketing
Introducing a new product via a crowdfunding campaign probably wouldn’t come to mind for most name brands, but it should. In a recent campaign, any brand, from small businesses up to major brands can create a campaign around a prototype product in order to gauge the true level of consumer interest. In effect, the company is making pre-sales on the product and if the crowdfunding campaign is a success, it would make sense to proceed. However, if the campaign doesn’t live up to expectations, there is no reason to invest more time and capital resources.
Charitable Campaigns
Well-known brand names have been partnering up with charitable organizations for a long time to raise money for every cause imaginable. Selling products where a portion of the proceeds goes toward the charity is incredibly common. In a crowdfunding partnership, the brand offers an incentive for people such as a limited edition version of the product or something similar. The funds collected go to the charity for their needs and the brand engages with its customers as they work together to accomplish a common goal of helping others.
Investment Campaigns
By embarking on an investment campaign, brands are able to put themselves in front of a large number of accredited investors. Besides the obvious benefits of having some extra cash on hand, there is also a dramatic increase in brand awareness. The investors, their families, friends, and relatives are all now potential new customers, or they become more loyal to the brand through the campaign. The future sales and long-term brand loyalty potential can be far more valuable than any amount a brand can raise in a campaign.
The bottom line is that crowdfunding is an incredibly effective way for big brands to engage current customers, attract new customers and to solidify their place in the market. If you’re interested in finding out more about crowdfunding and how it can benefit your brand contact me. I’d be happy to discuss this or any other topic related to crowdfunding campaigns and activities any time.
