Influencer Marketing for Crowdfunding: How It Works

So you’re looking to start crowdfunding and you think influencer marketing can help? Ding! Ding! We have a winner! You’re absolutely right. Influencer marketing is one of the best ways to move the needle on social media-based crowdfunding campaigns. 

But where do you begin? This article is a good place to start. We’ll walk you through everything from what type of crowd fund is best for your campaign, to choosing the best influencers to help market it, to sharing some examples of already successful crowdfunding campaigns out in the wild. 

Whatever your project and wherever your crowd, there’s likely an influencer with a following that aligns perfectly with your goals and target audience. We’ll help you find them and make the most of their marketing power. Let’s get started!

What is Crowdfunding?

First, let’s define our terms. If you’re here on The Shelf’s blog, you probably know what influencer marketing is. If you need a refresher, think of it this way. Influencer marketing is a typically digital alternative to traditional marketing that uses influencers and their followings to market on social media. Because influencers come with their own crowd, it’s a natural progression to influencer marketing for crowdfunding. 

But what is crowdfunding? Think of crowdfunding as a fundraiser. Remember selling Girl Scout cookies or Boy Scout popcorn door-to-door? Your neighbors pitched in a small amount of money and you were able to raise enough collectively to fund the annual camping trip. Crowdfunding is similar. In grown-up land, crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large group of people. So the crowd produces the fund. 

In today’s day and age, crowdfunding typically happens on the internet. No need to go door-to-door wearing a little sash. Of course, contributors to a crowd fund don’t necessarily get cookies or popcorn or anything tangible for their contribution (though they can). The benefit of contributing to a crowd fund is enjoying the reward of the finished product, whatever the venture or project is the crowd is funding. 

What are the Different Types of Crowdfunding?

There are several different ways to crowdfund. Each of them can benefit from influencer marketing, but before we dive into how you can market your crowdfunding project, let’s determine what sort of crowd fund you should start. There are four basic types of crowdfunding: donation-based, equity-based, debt-based, and reward-based. Your budget, brand, project, and goals will determine which type of crowdfunding venture is right for you. Here’s a quick explainer of each type to help you decide: 

DONATION-BASED CROWDFUNDING

Donation-based crowdfunding is pretty self-explanatory. This is a type of fund in which people give money for nothing in return. This is potentially the most generous type of crowdfunding and therefore can be difficult to achieve depending on your project. People are motivated to donate because they truly believe in your brand, project, or cause. Donation-based crowdfunding can be successful in the charity space. People feel good donating and investing in a good cause. 

EQUITY-BASED CROWDFUNDING

Equity-based crowdfunding is an investment for the contributor. People who contribute to the fund receive a portion of the business based on how much they pay towards the fund. Basically, brands give away a portion (or shares) of the company in exchange for this financial support. This type of crowdfunding is popular with startups and small businesses. 

DEBT-BASED CROWDFUNDING

Debt-based crowdfunding is categorized as peer-to-peer lending. This basically means that your brand is receiving a loan from the crowd that will be paid back. Those who pledge money for the project are guaranteed to get it back with interest before a certain deadline. Think of this as leaning on your community for extra cash rather than taking it to the bank. 

REWARD-BASED CROWDFUNDING

Reward-based crowdfunding is exactly what it sounds like. Contributors receive a reward for contributing to the fund. This is a particularly popular form of influencer crowdfunding because it feels similar to a social media giveaway. Rewards generally coincide with the value of each contribution. For example, a tier-one reward might be a t-shirt. Tier two may offer something more valuable like a free service. And so on. This incentivizes contributors to donate more and rewards them for their efforts. Win-win!

What Is Influencer Marketing for Crowdfunding?

Now we have a basic understanding of both crowdfunding and influencer marketing. How do we put them together to make some mega-successful ROI magic?

There are two parts to every crowd fund. The crowd and the fund, duh. The great thing about influencers is that the best ones come with a crowd built in. And this isn’t just any crowd. Influencers aren’t shouting in the townsquare to random passersby. They have curated, highly targeted audiences that often reflect specific niches. The best influencers are valuable as marketers because they have highly engaged audiences who truly trust them. These crowds they possess aren’t filled with randos. Their crowds are ideal audiences for someone’s brand. All you have to do is find the influencer who has the crowd that aligns with your target audience. 

Because influencers have developed trust with their audiences, or crowds, their followers may be more willing to contribute to a crowd fund when it has the influencer’s support and stamp of approval. Trust is the name of the game here. It’s natural for consumers to be wary of companies asking for their money. Especially if that ask doesn’t guarantee anything immediately in return (a reality for donation-based and debt-based crowdfunding). Influencers can bridge the trust gap and get contributors to buy into your brand and crowdfunding efforts. 

Is an Influencer-Powered Crowd Fund Right for Me?

Whether you’re new to the crowdfunding game or you’ve been raising funds for years, influencer marketing may be the boost your next crowd fund needs. Influencer partnerships can enrich your campaign strategy and infuse some much-needed creative power and variety when you need it most. If you’re looking for any of the following benefits in your next crowdfunding campaign, influencer marketing may be the way to achieve them: 

• Building trust with your audience
• Reaching niche audiences
• Increasing brand awareness
• Providing value to your contributors
• Developing cross-functional content

How Do You Market a Crowd Fund?

Obviously, there are many ways to skin a cat (what a horrible phrase) and market a crowdfund. This article is specifically about influencer marketing crowdfunds, so we’re going to focus on that. 

GOALS

The first step to influencer marketing your crowd fund is to define your campaign goals. Clearly you’re hoping to raise money, but are you also looking to increase brand awareness? Maybe you’re trying to deepen trust with the audience you already have. These goals will likely help you determine what type of crowd fund is best for your campaign. 

AUDIENCE

Once you’re clear about your goals, you’ll want to identify your target audience. Who are they? What do they like to see on social media? What would motivate them to contribute? And perhaps most importantly, who do they follow and trust?

CREATIVE VISION

After your goals and target audience are squared away, you’ll need to establish a creative vision. How will your content provide value to your contributors? How will you motivate them not only to click or follow but also to spend their hard-earned dollars to support your efforts? A creative vision and content ideas will help you in the next step which is…

INFLUENCERS

Choosing the right influencers! This is a fun part, at least for us at The Shelf. (If you want help with your influencer selection, let us know.) Find influencers who align with your crowd and make awesome content. Remember, the best influencer-generated content comes with some creative freedom on the part of the creator, but it’s always good to give them a brief with some direction. You want to give them space to create freely within the confines of your campaign. 

You may notice that the steps to marketing a crowd fund using influencers are pretty similar to influencer marketing for any other old product or service. You’re not wrong. There are, of course, more wrinkles to consider with a crowdfund, but the basic influencer marketing principles remain. 

How Do I Get a Crowd to Actually Contribute to My Fund?

One of the easiest ways to increase the chances people will contribute to your fund is to provide value to your contributors. This probably seems like a no-brainer, but it works! If you’re a new brand or start-up small business, this may look like running an equity-based campaign. For legacy brands looking to raise funds for a new venture or project, rewards-based crowdfunds may be the most successful. 

Everybody loves free stuff. You tell me something is free and it’s hard for me to pass it up. That’s why the reward or “free gift” economy is so compelling. By creating a reward offering, you’re incentivizing people to contribute to your fund. They get the moral boost of donating to something they believe in and the added bonus of getting a gift (or some other reward) for their generosity. Everybody feels good about the transaction, so everybody wins!

If you’re looking to run a reward-based crowdfund, consider what rewards your audience would find most compelling. Are they a tote crowd? Maybe they love a branded t-shirt. If your brand is more service- than product-focused, maybe a discounted service is the way to go. If I can get 20% off a massage, I’m way more likely to book the massage. You feel me? 

Find out what your audience wants and find a way to give it to them that balances their monetary contribution. There’s also an added gamification aspect to stratified or tiered rewards. Your most avid supporters will get to climb the ranks to that highest reward tier, and whatever the reason for being there, it always feels good to be on top. 

What Makes a Successful Crowdfunding Campaign? 

Successful crowdfunding campaigns do several things. They help you raise the funds, deepen your connection to your target audience, and create value for your contributors. If you go the influencer marketing route, they also result in a productive symbiotic relationship between your brand and influencer partners. 

Let’s take a gander at a successful influencer-led crowdfunding effort already out in the world. 

SOULCARE COACH ZAWADI NYONG’O

Zawadi Nyong’o pulls double duty as both the influencer and the brand in this crowdfunding example. Zawadi is a yoga teacher and SoulCare coach who maintains her small business with the help of crowdfunding. Her approach is donation-based, and it gives her contributors the opportunity to communicate with her directly via their donation. She uses the link in her Instagram bio to direct contributors to her Ko-Fi supporter page, Venmo, or Cash App. 

The messaging surrounding her donation structure is compelling (and a tale as old as time). A small donation, often advertised as the price of a cup of coffee, is marketed as just that. Buy Zawadi a cup of coffee with your donation and support her life’s work. This works well for an influencer-run brand because her followers already have a parasocial relationship with her and therefore are more likely to want to buy her a cup of coffee the way a friend would. In addition to these ever-present donation opportunities, Zawadi used her crowdfunding model to fund the publishing of her “I Am Always Here” affirmation meditation on @insighttimer. Not only do her contributors get to support her life and work, they also directly benefit from the services she’s able to create with their donations. 

Influencer Marketing for Crowdfunding in Conclusion

I hope this answered all your burning questions about how you can utilize influencer marketing in your next crowdfunding campaign. Raising money for a project or venture you’re passionate about is no easy feat, but rest assured it can be done. And influencer marketing can make it easier and potentially more fun! 

Find your crowd and raise those funds with the help of influencer partners who truly get your mission and your brand. If you’d like help finding those influencer partners or designing your influencer marketing strategy for an upcoming crowdfunding campaign, schedule a strategy call with one of our experts! We’re always happy to help. 

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