Could Crowdfunding Be The Magical Formula For Higher Customer Lifetime Value?

Information source #1 for trustworthinessWhile traditional advertising such as TV and newspaper ads and digital marketing such as sponsored links on Google help build brand awareness, they increasingly do not resonate with target audiences – especially with Millennials. And even with the explosion of review applications and sites like Yelp, word of mouth – recommendations made by friends, co-workers, or neighbors you know and trust – is still the most effective way to win new customers: 84% of consumers say they trust recommendations from family, colleagues, and friends about products – making this information source #1 for trustworthiness.

Word-of-mouth referrals create real value that is why companies spend approx. $2 Billion on word-of-mouth marketing with around 30% of that for food and drink brands. This type of marketing improves the effectiveness of marketing campaigns by over 50%. Over half of purchases inspired by social media sharing occurs within 1 week of sharing or favoriting and 43% of social media users report buying a product after sharing or favoriting it on Facebook, Twitter, or Pinterest. Word-of-marketing is the new black: Millennials ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products. Baby Boomers also ranked word-of-mouth as being most influential in their purchasing decisions about big-ticket items and financial products.

Word-of-mouth is the most valuable form of marketing – the one that consumers trust above all others and the one that is most likely to drive sales for your company, WHAT IS THE BEST WAY TO GET YOUR CUSTOMERS TO PROMOTE YOUR BRAND AND PRODUCT? Word-of-mouth is triggered when a customer experiences something far beyond what was expected – and good customer service is not enough: 39% of respondents say monetary or material incentives such as discounts, free swag or gift cards greatly increase their chances of referring a brand. Unfortunately,  there is no single formula for word-of-mouth success – but it starts with creating a culture that encourages your clients to consider themselves valued partners in your business.

What if we told you that we got the solution? Revenue-sharing aligns your customers interest with your interest. Consumers who use and like your product would love to see you expand – have a new product and make it easier for them to buy it. Allowing them to invest in your business using revenue-sharing approach is the answer – the interests or the business and customers-turned-investors are aligned – the more sales the business has, the faster customers see their financial return. And suddenly, your brand goes viral.

Crowdfunding As Word-Of-Mouth Marketing Tool

StartWise is leveraging the new legislation so that everyone can invest in companies they care about. Our crowdfunding platform enables individuals to invest in companies in return for a fixed percent of company’s quarterly revenue. The company pays its investors until they have received a multiple return on their investment (which is less than you would’ve spent on your marketing budget, by the way).