New trend: crowdsourcing. Inspiring the masses to perform a service for your company and engage them in your brand. Core systems, brand identity, customer service, logo design, commercial production, word of mouth, product development, recipes and more. Cheaper, doubles as a marketing effort, and empowers your strongest audience.
It’s not always a good idea to call out to the whole world. Gap’s logo redesign failed in part because a large number of submission artists were not regular Gap customers; they were not familiar with the brand. Certainly not as familiar as the customers who lashed back and reset the logo.
Enter: fansourcing. Fan–sourcing is more focused than crowd–sourcing because it challenges your fanbase directly – the people who know and care about you the most. A new record label in the UK invites fans to invest (for a share of the profits) in an album before the music is even recorded. This model threatens rule #4 of my true fans definition by blurring the line between fan support and ROI profiteering. Nevertheless, sharing profits with your strongest fans is an unrivaled channel for gratitude. It could empower your supporters and win you more true fans.
Fansource financing can offset considerable risk in your venture for the following five reasons:
Reason 1: Upfront Recoupment
Traditionally, you raised money to produce and then recouped costs when customers paid for your product. With fansource financing, raising money and recouping costs happens simultaneously. Pay before or pay after? As long as you can deliver on your promise to produce, what’s the difference? Less risk when you’ve already satisfied expenses before the product is made.
Reason 2: Less Emphasis on Profit
Investors expect a financial return. Fans expect an experiential return. When your investors are your fans, the product takes first chair to profit. Investors are very important and should not be undermined. But I promise you: fans will give you less hassle about the dollar – if you do good work, of course. Less pressure, less stress, less risk.
Reason 3: Fans Have Skills
By building a community around your project, you have thousands of supports who have talents and connections that could help you. Be resourceful (or perhaps fansourceful?). Know your fans. Do not be afraid to ask. They might love you enough to lend a hand.
Reason 4: The Quality Committee
Investors want your product to turn a profit. Fans want your product to be great. By bringing in fan investors, you are building a community populated by your toughest critics and most loyal supporters. Build a relationship with them, collect their expectations and improve your product. Better quality, less risk.
Reason 5: Fans Have Friends
With their hard-earned money in the pot, fan investors have more at stake in and therefore more attachment to your project. They want their friends to support the project and fuel their return. Fans will help you do the marketing legwork and reach more people.
While fansourcing reduces financial risk on your part, it increases fan retention risk. A fan invests thousands of dollars into your project and your project fails, no return on investment. Uh oh. You will lose the fan. They may even tarnish your reputation, hurting your ability to adopt new fans. That is why it is imperative to earn true fans who do not expect a return. Churches are really good at this. Kickstarter is kickin’ ass.
In a world of menial “like” buttons, ratings and million myspace friends, the notion of network is clouding the value of true fans. In this niche-saturated marketplace, fans are now more important to a brand than ever. They are your lieutenant commanders in marketing, stimulate the lion’s share of revenue, and take responsibility for the tribe. Filmmaker Kevin Smith values his fans and is self-distributing his latest film to them before anyone else. Identify your fans and show them appreciation.
A true fan:
- listens to you
- talks about you
- believes in you enough to give you money before your product exists
- does not expect financial return
Everyone else is just a customer.