You want to create a bad-ass music crowdfunding campaign that will absolutely crush it.
Indiegogo offers help through a Google Hangout Series, How to Run a Successful Crowdfunding Campaign, hosted by John T. Trigonis.
Indiegogo breaks a project down into 5 phases: Idea Vetting, Pre-Launch, Launch, Sustaining and Follow-up.
At Launch and Release, we’re are all about the pre-launch which is as crucial as the campaign itself.
The Pre-Launch segment (the video above) delivers music crowdfunding tips and tricks from guests Mike Mower and Nikhil Potdar of Outerloop Management. They have multiple successful music crowdfunding campaigns to their credit including a $100,000 music crowdfunding campaign for Misery Signals.
This segment is fantastic for musicians because it actually focuses on music crowdfunding which is quite different from other crowdfunding genres.
Mike and Nikhil know what they’re talking about, are very credible and make legit points.
However, they are management dudes who are used to working with bands who have a significant fan base. They also only had 45 minutes to cover what amounts to about a month’s worth of work!
You need to understand the context of what they are saying and apply their thoughts to your own unique circumstances. This will ensure that your efforts and planning are not misplaced.
To help with this, I will cover Outerloop’s advice on music crowdfunding and follow up with the Launch & Release take on things.
Outerloop’s Music Crowdfunding Tip #1: Know Your Fanbase
The first big point that Mike makes (around the 4:30 mark) is to know three things:
- What you can do to connect to your fan base,
- What your fans want to spend money on, and
- How you can convey to your fans that they are part of the process.
Mike goes on to say, “Do you have a fan base? Our experience with crowdfunding has been if you have somewhat of an established fan base… this is much easier. If you don’t and [you’re] struggling to try to grow your fan base while [you’re] also trying to sell your campaign… that’s an uphill battle.”
Host John T. Trigonis adds, “The more [you] have, the better [you’ll] be able to do.”
Launch & Release adds: Know Your 3 F’s (Fans, Friends and Family)
Knowing your fan base in only part of the story.
You need to identify all potential people who may back your project before making any plans.
We call this your Circle of Influence which is primarily made up of the 3 F’s:
Fans, Friends and Family!
For well-established bands such as Outerloop’s Misery Signals, their fans will be the largest part of their Circle of Influence so planning the video, reward ideas and goal amounts will center heavily on the fans.
But if you are newer, you may not have thousands of people on your mailing list or Facebook page. The couple hundred friends and family that you have may be equal to or even greater than your fan base and you must factor them into your campaign.
Regardless of the size of your mailing list and how much you are trying to raise, don’t ignore any of the 3 F’s which will result in a decreased number of backers and can even increase the risk of failure!
Just to be clear, the fellas in the video are not wrong. I’m certain they would be the first to say that friends and family are included in your fanbase. You just need to be clear on that fact and not get misdirected into focussing on only “fans”.
Mike also points out a super key fact: trying to grow your fan base while executing your campaign is an uphill battle.
Amen to that, brotha!
Many musicians misplace their effort towards getting their campaign in front of more people.
This is difficult enough without having to instantly convert them into customers who back your project. The chances of this are low and should take a backseat to reaching out to your current Circle of Influence that is already in place. These are the people who will become your backers.
This doesn’t mean you need to put your music crowdfunding project on hold until you have 5,000 fans on your email list!
It simply means that the plans and scope of your project need to accurately reflect your current Circle of Influence.
Outerloop’s Music Crowdfunding Tip #2: Set a Realistic Goal Amount and Price Perks Adequately
The second big point (at about the 7:30 mark) is to set a very realistic goal.
Mike encourages you to:
- Research artists that are similar in size and genre to help figure out how much you can raise and
- Focus on having adequately priced perks because the average perk is between $20-30 on Indiegogo.
John the Host supposes that the mechanism of crowdfunding is that you get small amounts of money from large amounts of people.
As they talk through how high your goal should be, Mike discusses the costs associated with the project. He says that people do care about what the money is spent on.
One example he gives is the producer. Another is the costs of manufacturing and shipping.
You need to know what your 3 F’s care about funding… Splurge for something fancy like a big-name producer or multi-page, color layout of your CD art? Or will a local producer who jives with you and a digi-pack do? Both would be less expensive.
“Will the crowd understand and believe the costs that [you] say are associated with this [project]?”~Mike
Launch & Release adds: Know How Much You Can Raise and Price Rewards Aggressively
Researching similar artists is one way to estimate how much you can raise.
There will be dramatic variance between artists so, at the very least, you’ll need to find enough of them to get an idea of the average.
The most accurate way for musicians to estimate how much they can raise on Indiegogo or Kickstarter is our Music Funding Estimator available in our Fail-Proof Goal Blueprint which uses quantifiable research and extensive testing to give you a staggeringly accurate estimate.
This Funding Estimator gives an estimate of the number of backers you will get and how much you can raise. The assumptions behind it are conservative so most people will hit the amounts. If you take the time to optimize your campaign, you can double or triple this estimate!
We are confident in the Funding Estimator and I highly recommend using it to help choose a realistic goal but even if you don’t use it, you need to know how much you can raise.
This is subtly different from setting a realistic goal amount because knowing how much you can raise allows you to choose a goal amount that has almost zero risk of failure!
And this is a high priority whether you are doing an all-or-nothing Kickstarter or a flexible-funding Indiegogo (in which you still want to beat your goal for psychological and marketing purposes… which we’ll go into another time).
This strategy will help you work towards your true goal by setting an official goal that you are certain to beat and a higher, unofficial goal that you’ll work towards that is based on your ideal project.
Back to the Indiegogo segment… The fellas also talk about the median perk on Indiegogo being in the $20-$30 range.
(I think he is actually talking about the perk most often selected which would be the digital download or the physical CD. This is different from the average which is typically around $50.)
The price of your rewards/perks is very important but not for the reason most people think.
Most people think you need to price like a pre-sell.
We think you need to price like a fundraiser.
You can read about the difference here but the bottom line is that pre-sell prices reflect standard market value while fundraiser prices are higher representing the premium a backer places on helping you out.
We have seen mounting evidence that backers are willing to pay this premium during a crowdfunding project.
Finally, while Mike encourages you to focus on those “pre-sell” perks in the $20-$30 range, we encourage you to focus on mid-level rewards between $50-$300 and upper-level rewards from $500 on up.
In the data we’ve compiled, mid and upper level rewards typically represent 60-70% of a project’s funding. That’s a lot!
It’s not always intuitive, but think about this fact: it will take 50 people choosing a $20 CD to equal 1 person selecting a $1000 concert.
If you don’t optimize your whole palette of rewards by having a smooth distribution of pricing, you are leaving money on the table.
Don’t ignore any rewards – low, mid or high – but definitely don’t undersell your project by excluding or drastically underpricing mid and upper level rewards.
Outerloop’s Music Crowdfunding Tip #3: Have a Compelling, Quality Video
When asked what assets need to be in place pre-launch (at about the 13 minute mark), Nikhil says:
“The first thing that we try to ask them to deliver is a compelling, quality video with great audio and, in some cases, a rehearsed and scripted pitch. You want the story to come across… You want the mission to really come across well.”
He points out that the video and other content that goes with the video such as photos for the gallery are very key.
Nikhil suggests getting this process in motion as it takes time to create the video and it is worthwhile to spend time on it.
Launch & Release adds: Before Anything Else, Focus on Your Purpose
Nikhil is right on about the video. It is very important.
But don’t overestimate the importance of it’s “quality” in the sense of audio and video quality. Like “Hollywood Blockbuster production is better than a selfie video on your iPhone” type of quality. We’ve written about how crappy videos can raise lots of money here and here.
You may have heard that having a video increases your odds of success two and a half times!
But the video isn’t important for its own sake. It’s not like having a video just “does something” to the viewer that makes them back your project.
The video is important because it allows you to communicate effectively to your audience.
So what’s really important about your video is what you are communicating.
And I will tell you right now that the single most important thing you need to communicate about your project is your Purpose and Mission.
Forget about the superlatives: your awesome, amazing, ass-kicking, best-ever songs.
Forget about the amazing Kickstarter rewards that you have.
Forget about the fact that you can ‘do this together’.
As Simon Sinek tells it, Start With Why. (Watch the video, it’s worth your 15 minutes.)
Levi and I believe so strongly in determining and communicating an artist’s Purpose that this exercise is the first and most important step in our system for creating optimized projects that will kick ass.
I would go so far as to say that having a strong Purpose and Mission and accurately, authentically communicating this is the single ingredient that can double or triple a campaign’s fundraising. This is completely non-scientific but it’s not far off and should illustrate how important it is.
A Word of Caution About Purpose
Knowing and communicating your Purpose is really easy to screw up. The most common mistakes are:
- Failing to dive deep enough into your Purpose and
- Failing to accurately, authentically communicate your Purpose in your video and project description.
It takes work to determine your true Purpose. You need to abandon the assumptions that you’ve lived with for so long and think deeply about Why you are doing music.
It will take at least a few days of thinking and refining to get close.
Once you feel like you really understand the core purpose of why you are doing music at all, many artists end up glossing over it in their video because 1) they think their Purpose is really obvious and 2) they’re more excited about the shiny “bells and whistles” of their project which they (mistakenly) think will convince people to become a backer.
First, it’s not obvious to everyone.
Second, they aren’t going to back your project because of how awesome the songs are, where you’re recording, or who you’re recording with.
The important thing about the video is nailing your Purpose and Mission in the video. This is the predominant feature of your campaign that will compel viewers to become backers…
Be Certain You Understand Your Own Circumstances
You will find tons of music crowdfunding tips and tricks out there and very rarely will any of them be dead wrong. But you always need to be aware of the surrounding context and how it is similar or different than yours.
Applying these tips and tricks to your music crowdfunding project is tricky business. But if you understand the mechanics of music crowdfunding and you think through what you are hearing, you’ll be able to create a successful project with little chance of failure.
The best way to learn about music crowdfunding is by taking advantage of the resources available here at Launch and Release.
Got a question or comment? Let us know in the comments section below!