We have all heard about crowdfunding campaigns, during which millions of dollars were raised to make a project become reality. Several platforms have grown to be international and help collect funds for large endeavors of any type. National platforms sprout each and every month, making room for more locally oriented projects to be published. They all, however, copy the same model and rarely modify the dominant mechanism. That is in no way an approach you would expect from a tool that is meant as the enabler of innovation of any kind.
There are several things about crowdfunding (and to some extend crowdsourcing) that make it an effective way of collecting private funds for both for-profit and not-for-profit causes. There’s the prize that you can get for supporting a project. There’s the conviction that the project is “worthy”of your support and that it’ll bring a product or a service that was lacking in your local market or community. There’s personal loyalty and support from friends and family. That is not, however, the entire story. It is in big part the game-like experience that makes crowdfunding so successful.
When we take a look at the crowdfunding mechanism, what we see are: a common goal to be reached within a predefined time frame; multiple players scoring points in the form of financial contributions to reach the common goal; a progress bar that tells you how much do you still need to collect (progress bars are one of the most commonly used game elements increasing user engagement); the risk factor – many platforms use the all-or-nothing rule, which means that your project receives funding only if you manage to raise the minimum of 100% of the sum you bid for at the beginning; if you raise 99% of the sum, the money gets sent back to the backers. In other words, crowdfunding is a game and we love playing it!
And so the natural question is: why not make it even more fun to play?
There is a number of game techniques and elements that can be successfully employed to increase user engagement on crowdfunding platforms, thereby helping fund more projects. Here are some examples:
- Points and leaderboards. Registered users could be receiving points for both their financial contributions and promotional efforts (i.e. 1 point for 1 tweet) and then be ranked on leaderboards based on the number of points they’ve earned. Leadersboards should in this case be visible also to non-registered users to increase the prestige aspect that goes with it.
- Badges. You’ve scored 100 points from promoting projects on social media? Earn a “SM guru” badge! Foursquare is a great example of how well badges can work.
- Levels. The more engaged user, the more points and badges he/she has, the more they should be allowed to do on the platform. Level 2 may, for example, allow you to vote on the weekly “recommended projects” picks.
- Challenges. Even though each project is a challenge, we can still increase engagement by organizing small challenges for all projects. Let’s say that each Friday the project that earns the most within 24 hrs or gets the largest number of tweets receives bonus funding (sponsors?). Short challenges with a tangible prize have the ability to highly motivate and make the game more fun and exciting.
And so on…
This kind of approach can bring benefits to all parties involved in the process:
- Those who collect money for their projects can get more support (be it financial or promotional) and thus are more likely to achieve their goal;
- Those who support projects* can become opinion leaders and patrons, which might be particularly attractive on theme-specific platforms (music, gender, etc.).
- Those who run the platform* – many people who end up supporting a project financially, do it out of personal bond with the author of the project and as such, may lack motivation to come back to the platform to support next projects**. Once they are provided with additional benefits coming from getting engaged, they might be more likely to come back and support new projects – and that makes a platform grow. Additionally, tools like points, leaderboards or levels make it easier for the owner of the platform to conduct a social network analysis and further customize the platform and increase engagement.
There is a number of reasons why people are so attracted to crowdfunding. Game-like experience is one of the most significant motivations and as such it should definitely be employed to a much larger extend than it is right now.
Would you be willing to try it out on your platform?
*I am leaving out the motivation related to pre-selling or venture investment on purpose. This is simply another topic.
**Based on empirical evidence.