How communicators can maximize crowdfunding efforts

Why do some crowdfunding campaigns hit or exceed their goals quickly while others languish?

The answer often has to do with what finance experts call “herding,” where people follow the crowd and invest wherever everyone else is investing.

Effective use of crowdfunding platforms’ communication tools can influence herding behavior to maximize a campaign’s success, finds the first study on this topic. Updates and comments on backer compliments encourage new backers, while constant pleas for more donations or bungled discussions of logistical difficulties can backfire. The paper concludes with several communication strategies that could be used by crowdfunding creators to increase the success of their campaigns.

“Just reminding your potential backers to contribute does not work,” said senior author Hai Che, an associate professor of marketing at UC Riverside. “Instead, project creators might want to provide them with project information and, possibly, encourage previous backers to provide a testimony.”

Hai Che