Crowdfunding is an increasingly popular way of raising funds for projects, whether they are personal projects or business ones. In many ways, the techniques needed for a successful crowdfunding campaign are very similar to those needed for a successful digital marketing campaign. So, what are the similarities and the differences between crowdfunding and digital marketing? In this guide, we will explore both, and what kinds of projects each are best suited for.
What is Crowdfunding?
Crowdfunding is a process used by many individuals, although it is also an integral part of many business models, too. Crowdfunding is a business context that essentially involves customers or potential customers paying for a product or service that doesn’t yet exist, with their donations being used to fund the development of this product or service, which the patrons then receive access to once it has been released. On a smaller scale, crowdfunding also applies to charity fundraisers which patrons do not personally benefit from.
What is Digital Marketing?
Marketing is a discipline that has a large crossover with sales, although it is a distinct field. While sales focus on direct contact with potential clients/customers in order to persuade them to buy a product or service, marketing is more about the framework and tools used in this process. For example, an advertisement campaign that draws a customer to your store is marketing, and there would be much fewer sales made without this!
Digital marketing refers to any marketing campaigns or public interactions that take place online, from on-site promotional copy to outreach campaigns on social media platforms or blogs.
Crowdfunding is Often for Personal Projects
While successful businesses and entrepreneurs sometimes use crowdfunding to finance an upcoming project (and are often criticized for doing so), and individuals can carry out digital marketing to promote personal products, crowdfunding is most commonly done by individuals or non-profit organizations, and marketing campaigns are carried out by businesses.
Crowdfunding is often used for smaller-scale projects. Think of your co-worker doing a sponsored run for charity, or your local church raising money to repair a broken window. It is unlikely that specific digital marketing processes will be used for these!
Digital Marketing is Often Outsourced
Many business operations are outsourced by companies, from accounts and HR to sales and marketing. There are plenty of digital marketing companies that can create full marketing campaigns for your business.
Marketing is Usually More Benefit-Oriented
Where crowdfunding is often an appeal to the generosity and faith of potential customers in your business, marketing usually focuses on the benefit to the customer rather than to the business. However, crowdfunding can (and ideally should) take some inspiration from benefit-oriented marketing—just make sure that your customers know that funding your product/service will benefit them when it is released!
Different Techniques of Persuasion May Be Needed
The “benefit-oriented vs. appeal to altruism” approaches are not the only area where crowdfunding and marketing techniques can differ. For example, you probably shouldn’t play up the “investment” angle when persuading potential donors to donate to a charity.
Despite the differences between crowdfunding and digital marketing, there are a few areas in which the two are comparable. For example, the importance of using social media, and potential cold email and follow-up templates can often be very similar and work well for either process.