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Successful Crowdfunding: From Pre-Planning To Post-Project Loose Ends
When artist Amanda Palmer made headlines after raising more than $1 million on Kickstarter to promote her album Theater is Evil, crowdfunding moved into the forefront of the collective consciousness as musicians everywhere wondered how they could achieve the same level of success.
Fans have certainly demonstrated their willingness to fund artists: On Kickstarter alone, more than one million people have funded more than 19,000 music projects, to the tune of $141 million.
Stories like Palmer’s, however, are rare; and in reality, fewer than 53 percent of Kickstarter music campaigns are successfully funded. Defying this statistic requires a lot of creative strategy and careful planning. Done right, innovative fan engagement is a win-win: Supporters feel like they’re a part of something big, and artists build a support system that enables them to thrive.
On Monday, April 20, 140 Bay Area music makers gathered at The Chapel in San Francisco for the third installment in the San Francisco chapter’s Music Business Night School professional-development series, “The Art of Crowdfunding.” Randy Chertkow and Jason Feehan, co-authors of The Indie Band Survival Guide, hosted this session and guided participants through each phase of a successful crowdfunding campaign, from planning to post-project follow-through.
Chertkow and Feehan outlined five steps that make up a successful campaign: choosing a project, setting a crowdfunding goal, selecting a crowdfunding platform, planning rewards, and planning and executing the campaign.
Fans fund projects that are intriguing and compelling; they want to be part of the dream. “This is something we as musicians do best,” explained Chertkow. “We’re trying to get people emotionally invested in what we are doing. And I think some of the most successful musicians make their music part of people’s lives.”
Your goal should be concrete, easy to understand, and achievable. Make sure that you’re crafting a crowd pleaser; backers tend to seek “social proof” that your project will achieve its goal.
A good rule of thumb is to calculate the bare minimum you’ll need to complete your project, and add a ten percent markup to cover the platform’s cut. Map out “stretch goals” that extend beyond your initial goal to fund additional projects such as extending tour dates or offering a vinyl release. “Even if you’ve hit the funding level, you want people to have a reason to keep the engine running,” said Chertkow. “A lot of crowdfunding is done by friends telling friends; it’s word of mouth. That’s why the stretch goal is so important.”
Selecting the right crowdfunding platform requires thinking through the entire execution of both your project and your campaign. Will you require a platform that offers custom music features? Is access to partial funding important? What kind of cut is your platform taking? Would you like supporters to be able to fund you after your campaign closes? “This is the framework you have to have in your head before you go out and attempt your project,” said Feehan. “You have to think through what you need.”
Musicians can choose from a variety of platforms, funding models, and features. The Kickstarter platform offers name recognition; Indiegogo allows partial funding. Other platforms include Tilt, ArtisteConnect, PledgeMusic, Oocto, Feed the Muse, and Sell-A-Band; spend time researching all of these options.
Artists who are planning to release work on a regular basis often benefit from a modern patronage model, such as that offered by Patreon, which lets supporters “subscribe” to funding on a per-release or per-time-period basis. Patronage models tend to be most successful for artists who release single tracks over time as opposed to offering their entire collection at once. “The patronage model rewards one thing over everything else: consistency,” said Chertkow. “I don’t care if you’re consistently bad; I just want you to be consistent.”
Dolphins, Minnows & Whales
When mapping out reward levels, provide an “on-ramp to funding” at the $1 level to lock in supporters. You’ll be sending these backers project updates, which will also serve as opportunities to upsell them or ask them to recruit friends.
The majority of funding comes from a very small group of customers. To borrow terminology from the gaming industry, think of your funders as minnows, dolphins, and whales. The standard 80/20 business rule applies here: “Whales bring in most of the money; 80 percent is coming from just 20 percent of your supporters,” explained Chertkow.
Create rewards that entice and satisfy all three levels. Whale superfans might bring in the big bucks, but never lose sight of the minnows. “People want to back things that are achievable and popular — that ‘social proof’ — so you still need to reach a lot of people to get that buzz going,” explained Feehan.
Factor in the actual cost of producing each award—think about printing and postage fees, for example. Chertkow and Feehan recommend digital gifts, such as singles, photo books, videos, and PDFs of lyrics and liner notes, at “minnow” levels below $25. Offer unique rewards, such as demo tracks. “Don’t make the mistake of giving someone who backed you in the beginning, when the chips were down, the same thing that someone on the street can get after you release,” warned Chertkow.
Chertkow suggested offering “easy upsell” rewards in increments between $1 and $25 (the most common Kickstarter bid level). Collect material early to offer as rewards later: Shoot tour rehearsal footage, save set lists. Don’t be afraid to browse other artists’ campaigns for ideas.
Consider setting “dolphin” reward levels in the $50-$150 range. Popular rewards include personalized albums, tickets to exclusive listening parties, and credit on an album or website. “People want to be recognized; they want to be seen in your credits,” said Chertkow. “These are valuable spaces.”
“Whale” incentives often work well in the $250 and above territory. Funders at this level are superfans who tend to look for personal rewards. “That might mean dinner, a house concert, green room access, or one-of-a-kind items,” added Chertkow.
Limiting high-level awards will keep them manageable, as well as increase their perceived value. Don’t shy away from offering a big-ticket $10,000 reward; you never know when someone just might come in at that level. “Plus, it makes all of the other awards look really inexpensive,” said Feehan. “And a big part of your job is to get everybody to donate $1, or $25, or $50.”
Planning And Executing Your Campaign
Once you’ve mapped out your plan, it’s time to craft your story. Write a clear and detailed description, create videos and images, and announce your plans on social media. Build a promoter list that includes anyone with an audience who’s willing to share your message: bloggers, podcasters, media, other musicians, superfans.
Schedule your “official” launch for a Wednesday afternoon (this is statistically the busiest time for retweets and shares) but precede it with a soft launch on that Monday to allow time to “seed the tip jar” with initial backers, so your project looks successful from day one.
Communicate with your supporters throughout your campaign: Ask them to share your project. Upsell to higher pledge levels. Announce stretch goals and “last chance to pledge” milestones. “Never say ‘congratulations, I made it!’ warned Chertkow. “You’re cutting off your funding if you do.”
Asking fans to invest in your art gives them a certain sense of ownership. You’re essentially inviting them to become a part of your dream, which will forever change their perspective on you and your work. Done right, a crowdfunding campaign will build deeper, more meaningful relationships with your dedicated fans, while allowing you to follow your creative path.