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Ramon de Hartog, Head of Marketing at Floship and host of the Flocast podcast, recently interviewed the LaunchPad Agency’s co-founder and president, Sean Angus, about the topic of how to start a successful crowdfunding campaign on Indiegogo or Kickstarter.
You can listen to the full interview from the podcast link mentioned above, and we’ve shared some of the highlights below.
I’ve been doing this for a long time. I have 25 years of experience and really my specialty has always been in launching new products into the marketplace. That’s really where my keen interest is. I work a lot with the startups and our specialty is making money for businesses when they need it the most. Our agency provides the 360 degrees of services needed to successfully launch a crowdfunding campaign…or even launch your product into the marketplace. As a whole, LaunchPad specializes in launching new products and companies into the marketplace with explosive growth and we do it either by a straight go-to-market or via crowdfunding. We have a great reputation and a 92% success rate in crowdfunding when the industry average has an 85% failure rate.
What got me into crowdfunding years ago was working for one of the top public relations firms and we had a client come in to run a crowdfunding campaign. We focused on promoting the Kickstarter campaign with a big PR push combined with a launch around CES. The campaign was a huge success and we ended up raising them $850,000. We had a very happy client and that campaign really helped put them on the map. So that was really my first foray into crowdfunding and then it just expanded from there.
We need to believe in the product and have the confidence that we can be successful so we don’t always take everyone onboard. We’re very straight, honest and we will tell you exactly what you need. Our crowdfunding PR agency will give you a lot of feedback because we deeply understand these startups, they’re putting their life savings into this and it is absolutely critical that we deliver success. When a new client comes to us, there are some important things that we look for. One of the first notes that I always ask is, “What is the status of your social capital?” Social capital is your friends, your family, email database, social media, anyone that can potentially invest in your campaign. Lack of social capital is the number one reason crowdfunding campaigns fail. It is absolutely critical that you start with a bang.
Absolutely. A lot of campaigners are in that position. They don’t have sound social capital. However, we do specialize in building your social capital. We have a program called the Blast-Off Pre-Marketing Program. It’s a customized, turnkey program that is designed to build your social capital prelaunch. First, we build a customized landing page that is completely optimized to ensure that you get the best possible cost per lead. Then we utilize Facebook ads to drive traffic to the page and build an engaged community of people interested in your product that are ready to back your campaign in the first few days of the launch. And that’s absolutely critical so if you don’t have it, then we can build it for you.
There’s a lot that goes into it. We do have a 92% success rate and the reason we have that is because of our integrated marketing strategy. We have a 4-phased approach to crowdfunding that’s battle-tested and proven, and it directly leads to our client’s success. Basically, when it comes to crowdfunding, there are three phases 1) preparation, 2) social capital building and 3) the actual campaign launch. The way we approach any campaign launch is very strategic, well planned out and perfectly executed. That is the reason for our success. For instance, one of the first things that we do when we start working with a client is we take a deep dive into their product, positioning, and key messaging. What do we want to say that will pique the interest of the target audiences? You only get one chance to make a good first impression and we really take that to heart.
So the first two weeks of engagement for a crowdfunding campaign involves a deep dive into product messaging and the target audiences. It’s all about positioning what we want to say. What are the benefits and selling points? This is a critical first step in the content creation process. So during this two-week process, there is a lot of internal work, brainstorming sessions, and research. By the end of this, we will have an internal document that’s approved by the client, and that is the foundation of all of our content moving forward. Content is king, and video is king of the content and we do a really good job to ensure the content we produce resonates with that target audience. It’s making sure that we understand the client, we understand the product, we understand the targeted audiences, and then we develop the content around it. Once the messaging is complete, then we will move into content preparation with landing pages, Facebook ads, a campaign page, campaign video, email marketing, etc… We really have the process in place to ensure our client’s success and our results speak for themselves. In fact, we have had several of our client’s videos go viral with over $200 million views.
An integrated approach with everything working together to engage your target audiences in several channels is what is going to deliver success. You’ve got to have an integrated approach with your social capital, social advertising, PR, influencers, and email marketing all working together to really launch with an explosion. That’s really what it’s all about. You’ve got to create success right from the start and really drive that funding. Especially in the first couple of days.
A lot of people that I talk to, they see the value of our agency. Unfortunately, there are some campaigners that are just bootstrapping it. They have very little money. It’s tough but it takes money to make money with crowdfunding these days. The number one expense you’re going to have in crowdfunding is ad spend. Unlike some agencies, we do not take a markup. We utilize our client’s Facebook ad accounts so your ad budget goes straight to Facebook.
So, you’re going to need an advertising budget to build up those email leads prelaunch. And then you’re going to need an advertising budget to drive potential backers to the campaign page when it’s live to drive the funding up. So the biggest expense campaigners will have in crowdfunding a Kickstarter or Indiegogo campaign will be allocated to advertising.
We actually just formed a partnership with a company that can finance our client’s ad spend. I’m really excited about this. We’ve had a lot of good success over the years but our biggest limiting factor is lack of ad budget for these campaigns. There have been so many other campaigns that would’ve achieved such a higher rate if we had the additional ad budget.
So now they can finance the ad budget and all they have to do is come up with all the prep and everything for premarketing, and as long as we hit the campaign goal and they’re getting good ad metrics, our partner will finance as much as we need. This is a great resource for our clients and I’m really very excited about the potential this brings for bigger raises.
When it comes to marketing for Kickstarter or Indiegogo campaigns, we recommend having at least 10% of what you want to raise allocated to ad spend. So if you want to raise half a million dollars, then you’ll need about 50,000 dollars in advertising budget. If you want to raise a quarter of a million, you’ll need about 25,000 dollars in budget. With that said, that budget will only be spent if we are getting a good return on ad spend and hitting our KPIs. We take it very seriously.
Now, for premarketing, you will need an ad budget to build up those pre-launch email leads. Indiegogo recommends having 10,000 but it depends on how much you want to raise. Typically, we see the cost per lead running between 1-2 dollars, you could estimate about 1.50. I’ve seen it lower, I’ve seen it higher. It just really depends on the reception of the product by the target audiences.
We manage our client’s ad spend very carefully. We use our client’s Facebook Ad Manager and their Facebook page so there is always complete transparency. And I can’t emphasize how important that is. As a startup, you have to know how your money is being spent.
It depends on the strength of your social capital. We don’t set that campaign goal until about a week out from launch when we’ve got a really good read on the email database and the engagement. Then from there, we’ll set the campaign goal to ensure we can reasonably hit 30% of the funding goal in the first day or two. My advice, don’t set it too high! Make sure that you can attain it easily with the strength of your social capital because the worst thing you can do is launch and not go anywhere.
The number two reason campaigns fail, lack of preparation. It’s a lot of moving parts and you’ve got to make sure that every part is optimized perfectly to engage your target audiences. It is absolutely critical. That’s why we have such good success rates, we have our 4 phased approach that is designed to deliver success.
Some people think of fulfillment kind of as an afterthought and that’s a big mistake because you have to be very exact on your calculations. A lot of stuff goes into it. So if the campaigners don’t have accurate cost on the fulfillment, that can take a lot of your profit right out the window. They need to talk to someone, like Floship, so they can get a firm determination on their shipping and fulfillment costs because if you don’t, you can screw yourself in the end. Instead of making a 50% profit, you’re making a 20% profit.
Only 15% of campaigners are successful so you need to come to this fully prepared. Think about your branding, your product, key features, target audiences and really have a game plan before launching your crowdfunding campaign on Indiegogo or Kickstarter. You’ve got to take the time to properly prepare for success.