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Initial thoughts on future cosmetic brand crowdfunding campaign.
Hi, Lina.
You will find research, my considerations and risks to align expectations on the project
Reference projects
Deodorant and shower cosmetics categories. I didn't calculate currency difference. Difference with Euro and CAD is not that big to make high-level estimations.
I think we will need to review unsuccessful projects also if we move forward.
Please go through the links to study the nature of the projects out there and get subjective reality check if we are different and why.
Median funds raised $
Median goal $
Median contribution $
Median number of backers
Channels and content assets
You will find two lists: channels and content to be developed for prelaunch and campaign live stages.
Minimum required channels set
We can expand this list to social media, influencers and press outreach, but it’s not about required but sufficient list.
Minimum required content assets set
Rough roadmap
Roadmap above could be pivoted depending on the learnings we get along the journey (cost of subscriber, user feedback).
What happens during the stages?
Content development
Financial validation
Prelaunch campaign
Kickstarter campaign
Costs one should expect along the way
These are very broad and depend on approach to production but you can get the idea.
Fixed costs one has to expect
It’s different for every project but I share average here to give you the idea. I do not split the budget to the project stages here.
Keep in mind that this is fixed costs and ads budgets are on top of this.
Closing notes
Lina, let me share basic model that is build upon benchmarks:
Goal: $70200 (CAD $ 65 000 - business goal + 8% = $5200 of kickstarter and banks, note that projects spends are not included here)
Median contribution (price): $33 (I doubt that expectation about retailer buying from kickstarter is relevant. They do not do it usually unless you are serial creator with very good track record)
Number of backers needed to hit the goal: 2127
Number of subscribers in the waitlist to back the goal 100% by prelaunch efforts (assuming subscriber→backer conversion is 2%): 106350
Mediabudget needed for acquisition of required number of subscribers (assuming cost per acquisition is $2): $212700
Obviously spending more then you expect to raise doesn’t make sense but this model informs us on changing variables of the setup:
I believe that the best course of actions is to run financial validation to get real about numbers relevant to your particular case and update financial model upon it.
My feeling is that
If we add up my fix ($4000) total budget for validation phase would be approximately US $5500 (plus content development budget).
My involvement
I suggest 2 packages: consulting and full service.
1. Consulting is hourly $53/h. You could expect 20-200 hours for the project depending on marketing proficiency on your side. Usually this option is good fit for teams that have marketing expertise but lack crowdfunding experience. I help to fill the gaps and avoid specific pitfalls. Key in this option I don't execute on my side.
2. Full service is fix + percentage of funds raised. Fix is $4K upfront. Percentage is 5-10% it depends on the media budget you allocate to the project. More of your budget, less of my cut. Mind that source content production is not included in the fix. This option is good for teams that have no idea about marketing/media production and do not plan to learn it on their project. I can split fix part in 2 parts ($3K and $1K) first is paid before we start the collaboration second one is paid before we hit the launch button. That will give you the opportunity of save if we will see that launching is not the best option.
Getting back to our conversation during the meeting I think full service is better option for you but please weight the risks carefully.
Next steps
You review the document
We run Q&A session over this doc.
Decide if we go further together or not.
Input info
Hi, Aleksei
Thanks for sharing you current portfolio. All sounds great product and campaign.
We are redefining eco-friendly, starting in our eco-conscious customers' bathroom.
We really start from scratch, we are not in SM and do not exist online yet. We were 100% focused on market study and product development / sourcing a manufacturer for production, the past year.
Please see below my answers to your question.
1) What is product concept? (Problem vs Solution)
We are launching the perfect morning routine duo: a refillable hybrid body wash and a refillable roll-on deodorant . All that from the comfort of people's home.
Both products are coming in the form of a powder that eliminates water waste and the need for disposable plastic in packaging. The powder body wash can be used as it is - perfect for travelling and super convenient. Just add water for a change of texture and to get your usual shower gel, perfect for folks who are not a bar soap fan but still want to do better.
The roll-deodorant is a - just add-water concept that will transform into your usual efficient/ nice smelling deodorant without the harmful ingredients and the packaging waste.
The problem: consumers are often creatures of habit, and switching to eco-friendly products may require them to change established routines, which can be perceived as inconvenient. Our solution is to offer the closest experience to what they know when it comes to body wash and deodorant, that combines efficacy, safe ingredients and an option that will eliminate single used plastics.
While many companies have made strides in developing sustainable formulations for these specific products, many of them do not offer a low waste, zero single-used plastic option.
2) What is future retail price?
The future retail price for the body wash is around $12 and $14 for the deodorant
3) What is your funding goal?
Funding goal is CAD $ 65 000 that is the minimum to be able to cover production cost
Anything above will be great.
4) What are your resources right now? (Email subscribers, sm followers, previous customers)
No followers on SM, roughly 100 people in my email list and a good half of them are friends and family. The other half are the people who tested the products and gave feedbacks.
5) What is your marketing budget?
I need to hear what would be the minimum budget to be able to reach the funding goal.
This is my first time ever attempting to launch a crowdfunding campaign, I need someone who is willing to advise and will really act as apart of the team believing in the product and the mission. Someone who is ok with ambiguity since everything I know about crowdfunding is what I have read about it. The scope will involve prelaunch Lead generation (strategy and operation/coordination) with Landing page set up / Ad set up and running & adjusting. If all goes well:
2. Email Marketing copy and send outs
3. Campaign set up (pledge management recommendations and other necessary tools for shipping etc.)
4. Campaign launch and management - KS (marketing, PR, strategy and day-to-day operation)
5. Backers relations
6. Transition to e-commerce or another Indiegogo campaign
Thank you for being very straightforward, I really appreciate it. I would be happy to jump on a call for sure.
About the imbalance you see between funding goals and retail price - it might make more sense to say that the reward tiers will be bundles with prices ranging from $ 33 to $ 500 for retailers. I need guidance on setting the reward tiers as well.
As for the problem statement you are right to bring this up. I have been struggling with nailing this part. I started this project based on the idea that eco-friendly products aren't convenient enough that's why so many people are not converting (there are a lot of aspects in that concept of convenience) market studies confirmed most of it but that's the problem.. which angle to pursue to have a clear problem statement...
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