April 10, 2014: The recent purchase of Oculus VR by Facebook is a textbook example of how to alienate one’s dedicated brand advocates. Originally a small tech startup and hobby project, Oculus had a two-year rocket ride that made the company both a VC darling and scrappy Internet underdog. In the wake of Facebook’s acquisition, however, much of Oculus’ original brand equity is now in ruins, to the point that many of the original Oculus backers have expressed opinions suggesting they feel “used.” Even larger companies, such as Notch (the creators of Minecraft) have pulled out of Oculus-related projects.
Why So Much Blowback?
One can make the argument that Oculus was under no obligation to behave in any way once rewards had been delivered to its crowdfunding backers, but only a fool would suggest that there’d be no blowback for the brand. Oculus’ exit strategy might have been irresistible to its principals, but the argument that refusing $2 billion from Facebook would have been a breach of faith with the VC firms that had invested in Oculus is today falling on deaf ears with the brand’s original stakeholders.
Which isn’t to say that crowd funding is a bad way to incubate a product. Even huge companies like GE are partnering with crowdfunding platforms. When done right, crowdfunding can create enormous amounts of good will and establish a rock solid base of fans who will act as brand advocates. Even if the capital raised is negligible, the dividends in branding (and sometimes, a boost in PR visibility) can be enormous. Already, crowdfunding is heavily used in publishing, genre media, and indie film making. Crowdfunding is not just for small, indie outfits. It is vital to understand that your crowdfunding campaign is an unambiguous statement that your brand will deliver. If the campaign is not run well, you’ve just created an entire community of people who now will hate your brand.
Doing Crowdfunding Right
Avoiding the kind of blowback now tarnishing Oculus VR means carefully tending your crowdfund backers, engaging with them, listening and taking care of their needs. It also means understanding that:
- Crowdfunding isn’t secondary, it’s primary. Even if you’re using crowdfunding to promote just one project or product line, the backers of your campaign are pledging themselves to your entire brand. These people are an immediate barometer of how your larger audience feels about your brand. Even if they represent a base with divergent opinions, a crisis amongst your crowdfunding constituency is surely a sign of bigger problems.
- Crowdfunding happens in the social artery. All crowdfunding campaigns — like any effective online campaign — must have a website, video content, separate social media identities for the campaign, and a basic SEO strategy. In other words, such campaigns need to be organically integrated. Light promotion of your regular business with your crowdfunding campaign is appropriate, but too much promotion will be seen as spam.
- Keep the content flowing. Information and updates are vital to crowdfunding campaigns. You can gently introduce relevant content from your crowdfunding campaign into your social streams and content venues for your regular business and brands, but don’t try to use your crowdfunding socials to promote your regular business. Crowdfunding backers are there for your project. Awareness of who you are is enough promotion if they are interested in your other offerings.
- Maintain touch. If your crowdfunding campaign successfully executes and your product ships, you now have a list of direct brand advocates that can form the core of e-mail lists, social media communities and other launch pads for further traditional and crowdfunded campaigns and efforts. This kind of direct marketing is gold, because these advocates are already paid for and can continue to perform past their original acquisition.
- Above all, listen. Keep an alert eye on tweets and other social media signals as the campaign progresses. Make use of social analytics. Test subject lines with your direct e-mail updates. Also, compare this performance with that seen with your regular brands and website, especially in terms of keyword analysis. Seeing which content resonates with your regular efforts and your crowdfunding campaign is important tactical information.
The Lesson
Crowdfunding can work wonders for you if you don’t breach the faith of your original stakeholders. Such campaigns can can lift the profile of *all* your brands. In this age of so many failed crowdfunding campaigns on Kickstarter and Indiegogo, a successful crowdfunding effort can boost your visibility, brand equity, and relevance.
Have questions about your brand’s online equity and social standing? Contact us.
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