Does Crowdfunding Impact Customer Participation?

Crowdfunding has emerged as a powerful tool for entrepreneurs, providing access to capital and fostering deeper connections with potential customers. While the financial benefits are undeniable, recent studies have shed light on an underappreciated advantage: crowdfunding’s ability to enhance product development through active customer participation. One of the most crucial aspects to crack for any business is to hold on to a loyal customer base with active participation. Hence, this NUS Bizbeat article explains the correlation between crowdfunding and customer participation. 

According to the article, crowdfunding offers a unique opportunity for companies to connect with potential customers and receive valuable feedback during product development. However, the article suggests that presenting a fully developed product from the outset can be counterproductive. An analysis of over 18,000 Kickstarter campaigns revealed that campaigns featuring limited customer involvement achieved success rates of only 27%. The article suggests that customers are more likely to invest in products they feel they can influence, hence increasing customer participation. In fact, campaigns that incorporated just one customer-suggested feature saw their success rates nearly double to 62%. According to the article, this highlights a key takeaway for entrepreneurs: avoid overdeveloping your product before launching a crowdfunding campaign. While presenting a completely raw concept may not be ideal, the article suggests that customers respond more positively to a work in progress, allowing them to feel like they are contributing to the final product.

Active customer participation is crucial for businesses. However, it is daunting to find a customer base for businesses often. Read through the preceding text to get to know more.