What’s the difference between product and project crowdfunding – and which type is your campaign? It’s worth thinking about ahead of time, as it can really help you pin down who you’re talking to and why they’ll care about your work.
When you’re running a rewards-based crowdfunding campaign, both product and project campaigns share a few characteristics:
- Backers usually get something – whether a physical or digitally-delivered item – in return for supporting.
- Your campaign could either be all-or-nothing or flexible funding.
- You’ll need to tell the story about what you’re doing and why – using words, pictures, and video.
- You’ll need to get the word out about what you’re doing!
But what distinguishes them?
- Rewards are secondary to the main aim of the campaign (‘back our campaign to build a community centre and we’ll send you a postcard to say thanks’).
- Backers get involved because they want to see your project happen – whether or not they personally benefit (backers for ‘create a teaching kit to support LGBTQ youth’ may not be parents or teachers themselves).
- Most backers already know and trust your work/your track record (paid advertising to new audiences, for example, may not gather much interest).
- Fundamentally, you want to walk away with a lump sum that’s enough to make your project happen.
- Rewards are the central aim of the campaign (‘back our campaign and get your very own custom-built junk-bot’).
- Backers get involved because they love and want the product you’re producing (and may want to buy more than one).
- With good marketing and advertising, you may reach a lot of new audiences (but you’ll still need to have a core base of your own fans to get the ball rolling!).
- Fundamentally, you want to (pre)sell enough units to cover the costs of the campaign, or reach enough new audiences, or fund the initial production run (product campaigns may not necessarily have much money left over after fulfilling rewards, and that’s okay).
The way you approach a product vs a project crowdfunding campaign could be really different – but no matter what you’re doing, you’ll need to tell a compelling story, and show backers how they can be part of your journey.