Customer Experience lessons from Kickstarter.
Crowdfunding has really taken off in the last 3-4 years. It has generated over $17.2 billion in North America alone in the year 2019. It was provided small businesses and entrepreneurs a new avenue to reach investors and funds previously unavailable. It represents another avenue where digital technologies have democratized the economy – making funds and investors available to anyone, simpler and easier.
From experience backing multiple projects on platforms like Kickstarter and Indiegogo, I’ve discovered some basic lessons that makes a difference between a good project and a poor one. Of course, crowdfunding essentially carries a risk where a product itself may not make it to market and investors all lose out. This is not about the risk but about how creators or project owners can create a better experience for their investors (or backers).
Communicate Fast and Early
Once you have put in some of your own money into a project, there is a sense of ownership. This applies to any organization essentially – you know have become a customer, whether or not you have received the product or service. First thing all backers (individuals who have invested in a crowdfund project) all want is information. Successful projects often communicate regularly and quickly. This also happens when things go well or when things go wrong. Keeping silent here results in a poor experience for backers. I realize that projects that do that result in my feeling more positive.
You will see that in many projects, backers end up calling for news so many creators are failing this crucial step. Understandably, majority of projects are created by entrepreneurs or small teams so they may be overly stretched in terms of doing so many things trying to get the projects off the ground. That said, it is equally important to also ensure communications to backers are of priority in order to have a good experience for backers. It still applies, in fact more so in crowdfunding that word of mouth marketing is a key advantage!
When things go wrong or delayed, backers will be invariably upset. For any invention or creation – whether product or service, there will be the invariable bump in the road. When that happens, backers get upset. Also, with backers, the understanding of how crowdfunding works varies. For experienced backers, they may understand that the investments are part of bringing the product or service to life along with the associated risks compared to buying pre-made product off the shelf. Newer backers don’t have this understanding generally so the volume of inquiries or complains when things go off-track is much higher than a typical retailer or vendor.
Therefore, being responsive goes a long way in smoothing out the bumpy customer experience when crowdfunding. At some point, this may be overwhelming to the small team behind the project and quite likely, it is something generally overlooked when the excitement of bringing a new idea to market. That’s why I do recommend that CX needs to be integral to any business strategy. If most projects take this into consideration, quite likely they may need additional help. I believer that factoring in resources for customer service may improve a project’s success rate.
Things go wrong all the time. I’ve written here before about how service recovery can be greater that delivering great service. The risks of crowdfunding is clearly much higher than buying a product on amazon.com or Alibaba. Most common occurrence is that delays happen because there are many unforeseen issues that impact time to market. While creators usually factor buffer time, it usually is more optimistic than reality. Afterall, you need to balance “marketing” needs and production needs. The saying is that to under promise and over deliver but in this case, if a project has a long delivery time, it may not attract backers. Backers obviously have invested some money in the project so they do expect some honesty when things get delayed or wrong. Misleading backers will not only damage the customer experience but also the brand in the long run.
I have backed about a dozen projects on the two large crowdfunding platforms – Kickstarter and Indiegogo. One product failed completely to materialize. Overall, I realized the projects I share with friends or family or even promote are those projects where they’ve done the three things above well and consistently. Don’t forget that during the rush to create your latest idea, all of those behind you, backing you need and have the right to know how things are going. Keep creating!