10 Reasons Why Affiliate Marketing Works for Crowdfunding

Many Kickstarter and Indiegogo marketing services require a large upfront payment or take a high cut of everything raised. If you consider the amount of work that goes into promoting a crowdfunding campaign, it is only fair that these service providers are compensated for their effort.

However, the problem with this pricing model is that the project creator will get stuck paying the bill regardless of whether or not the hired service is able to deliver the results they promised.

As a project creator, you can spend hundreds or even thousands on things like acquiring email lists of potential backers, paid website ads, and sponsored emails— but there is no guarantee that the people you are reaching through these services will be the right fit for your project.

Most project creators are individuals or small teams who don’t have a huge marketing budget. Project creators have to be frugal with their money and save where it counts so the funds raised can go toward the actual project.

That’s why affiliate marketing can be an excellent choice for creators using Kickstarter or Indiegogo to run their crowdfunding campaign.

Affiliate marketing (sometimes called referral marketing or influencer marketing) is a sales and marketing strategy where you, the creator, encourage your backers, media partners, and brand advocates to refer their network to your crowdfunding campaign in exchange for a reward when that referral leads to a pledge.

Here are 10 reasons why affiliate marketing works for Kickstarter and Indiegogo crowdfunding campaigns:

1. You only pay for results.

Affiliate marketing follows a pay-for-performance pricing model, meaning you only pay when you get real, tangible results. Unlike most online advertising which charges per click or by the number of views/impressions an advertising piece gets, affiliate marketing only costs a percentage of the sales it helps generate.

This means that if your affiliate marketing links generate 1,000 clicks to your crowdfunding campaign page but don’t result in any pledges, you don’t pay a thing. By contrast, 1,000 clicks through a Facebook advertising campaign can cost you hundreds of dollars and can still run the risk of bringing in 0 new pledges.

This makes affiliate marketing one of the most cost effective ways to promote your crowdfunding project.

2. It’s virtually risk-free.

In addition to only paying for the referrals that lead to an actual pledge, affiliate marketing apps like Kickbooster have systems in place to protect the project creator from losing money:

• If the project is not successfully funded, the creator won’t have to pay out any commissions
• Every pledge is validated, so the creator will never get stuck paying commissions on fraudulent or failed pledges
• Commissions are only paid on the pledges that come through the affiliate links, not on the total funds raised by the campaign

If your fixed-fundraising campaign doesn’t reach its funding goal or you don’t get any successful referrals (referrals that result in a pledge), the absolute most you will have to pay is the $29/month subscription fee for the duration of your campaign.

3. The conversion rate is higher than other forms of advertising.

People are 4x more likely to make a purchase when they are referred by someone they know and trust. Affiliate marketing leverages this by encouraging your backers, influencers, media partners, and fans to share your project with their respective networks. A personal referral or an endorsement from a trusted influencer goes a lot further than an impersonal email blast to people who have never heard from you before. This makes affiliate marketing one of the highest-converting forms of advertising.

4. You decide what you pay.

As the project creator, you get to choose how much you’re willing to pay for a referral. Most creators offer a 10% – 15% commission, but the rate you offer is ultimately up to you.

It is important to keep your margins in mind when determining your commission rate. If the price of your reward tier only allows for a 10% margin, your commission rate should not exceed 10% (unless you’re okay with losing money).

To give you a better idea of the cost, here’s what you would pay per successful referral at a 10% commission rate:

5. You get free (quality!) content created for you.

Content creators like bloggers, vloggers, influencers, and even established publications are always looking for ways to monetize their content. After all, it’s their business and they need to get paid for their work!

By offering a referral program, you enable content creators to earn a commission on the pledges they help generate through the content they produce. The amount they earn is directly correlated to the effort they put into producing quality content to showcase your project, so it’s in their interest to help you succeed.

Content creators may want to negotiate a higher commission rate to help provide assurance that they’ll be fairly compensated for their effort, but at the end of the day, you are still only paying for referrals that result in legitimate pledges.

6. It increases your chances of getting media coverage.

Larger media outlets can get hundreds of requests for press coverage every week, so your chance of capturing their attention and getting coverage for your project is slim. Offering commissions through a referral program is a great way to stand out in a thick stack of press releases and increase your chances of getting media coverage for your crowdfunding campaign.

This post breaks down the 3 key elements you need to consider when pitching your project to the press.

7. It’s a great way to incentivize and reward your community.

Mobilize the community you spent so much time and effort building by incentivizing and thanking them for helping you spread the word about your crowdfunding campaign. In general, backers are very dedicated individuals who love talking about and sharing the projects they support. Running an affiliate marketing program allows you to capitalize on that post-pledge excitement and encourage your backers to continue helping you promote your project.

Your backers will be able to speak to your campaign and to the reasons why they chose to support you, which just might be enough to convince their network to support your project too.

8. It allows you to tap into new audiences.

Affiliate marketing increases your reach in ways that other marketing methods just can’t compete with. When you run an ad on Facebook or pay for a placement in an industry newsletter, you are assuming that’s where your prospective backers are. By running a referral marketing program, you are empowering your supporters to use the methods and messages they know will work to convince their own network to back your project. Not only are they familiar with your project, they also know their audience and how to best communicate with them— whether it be through their personal blog, direct messages, or social media channels. These are mediums and audiences that you simply would not have otherwise had access to.

9. It helps you build an army of advocates.

When you run a referral marketing program, your affiliates become ambassadors of your brand. Their success is dependent on your success, so they are motivated to speak positively and frequently about your project to help you get funded.

Your army of advocates can live beyond your crowdfunding campaign too. If you choose to open an eCommerce store, you can create a new referral program and invite your backers and affiliates to continue earning commissions by helping you promote your store. The transition from crowdfunding to eCommerce is especially easy if you use an affiliate marketing app like Kickbooster, which integrates with both crowdfunding and eCommerce platforms.

10. It’s easy to set up and run.

Launching an affiliate marketing program with Kickbooster only takes a few minutes to set up. All you have to do is input your campaign URL, choose your commission, customize your affiliate signup page using a pre-built template, and share your referral program with your network! Kickbooster will take care of generating tracking links, validating your pledges, issuing commission payouts, and more.

Learn more about Kickbooster's referral marketing tool here!