Written by Bob Leach Steps to a successful crowdfunding campaign Crain's Clevelnad Business By SHARON SCHNALL 4:30 am, August 11, 2013 In the past, he pledged support for two small business ventures on Kickstarter. As a reward for or fulfillment of his support, the campaigning entrepreneurs respectively promised him an iPhone holding device and iPhone magnetic backing. “I am interested in new and interesting programs. I like following the entrepreneurial spirit,” said the Rev. Young, who is senior pastor at St. Paul Lutheran Church of Westlake. Most recently, that crowdfunding curiosity led to his discovery and financial support of Better Bit of Butter Cookies of South Euclid; in turn, owner Christine Zadnik Mehling promised a cookie-decorating class and company tote bag. Mrs. Mehling's Kickstarter campaign sought supporters for her business's relocation. The Rev. Young enjoyed finding a local business and planned to use the class reward as a birthday gift for his wife Jeri Young. The decorated cookies brought home by his wife and two guests were delicious, he said. Previously, the Youngs attended the business's open house; Mrs. Mehling invited her Kickstarter supporters. Although there was some delay in reward fulfillment and a desire for more communication, the Rev. Young said he was pleased with his latest Kickstarter experience. As for previous experiences, the magnetic phone backing arrived a few weeks late, but was built as promised. Not so with the iPhone holder: after 18 months and no reward, he asked for and received a nearly full refund. “Any consumer thinking about contributing to a crowdfunding campaign should research the company seeking money as well as the crowdfunding platform,” said Bob Cohen, CEO of the Braintree Business Development Center of Mansfield. “Red flags include poorly produced video pitches, a product that has not yet been prototyped, vagueness about what the money will be used for and lack of clarity about what the contributor will receive in return for the contribution,” Dr. Cohen added. As for entrepreneurs who have a successful crowdfunding campaign, steps can be taken to proactively manage backer relations. Offer rewards that can be handled, ones that can be easily manufactured and/or ordered and shipped. “Good business practices translate into good crowdfunding practices — have turnaround procedures in place to process orders sooner than later,” Dr. Cohen said. Evaluate if the campaign can sustain rewards, particularly the reward shipping costs. “Make sure the reward isn't going to eat away at the money that is being raised,” said Valerie Mayen, owner of YellowcakeShop, a contemporary garment shop in Gordon Square, showcasing Ms. Mayen's original designs for women and children. “Sometimes you cannot reward the client, when the business is in a state where it needs to be built up; you have to be smart about giveaways,” said Ms. Mayen, whose latest campaign was not reward-based. Owner communication builds customer relationships. “We encourage people to be transparent and open with their backers,” said Justin Kazmark, a Kickstarter spokesperson. “It's not just transactional activity; it's emotional...Backers find it compelling.” Regular communication conveys that supporters are important. Give backers behind-the-scenes access; acknowledge the business demands, describe how campaign goals are being reached — even if progress is incremental. “Frequency is important; stay on their radar, but don't annoy them ... Multiple postings per day are a turnoff,” said Rachel Kacenjar owner of Re/Dress of Old Brooklyn, an online plus-size modern and vintage clothing store. “People want new information. They don't want the same thing over and over.” Take customer service seriously: Be responsive when supporters post or email complaints. “Everybody says, "The customer is always right' — the customer is not always right, but you do have to be your kindest in resolving a problem,” Ms. Mayen said. “Where you can bend — bend; where you can't, be kind.” Be in this for the long haul: Maintain the supporter connection. “There are benefits to crowdfunding beyond cash ... being able to reach out to them (supporters) forever,” said Rose Levy, a spokeswoman for Indiegogo, another online crowdfunding site. “You have this customer base of people who voted for you; use them as your evangelists.” Confirm with the crowdfunding supporter that it's OK to move their contact information into the business's general customer database. Keep them flagged as crowdfunding supporters, though, for the next crowdfunding campaign. Link to the article http://www.crainscleveland.com/article/20130811/SUB1/308119997