Science of persuasion and Crowdfunding

In high school I took a course in psychology and a short chapter was about compliance techniques you may not realize people use such as a friendly owner offering patrons a warm cup of tea on a snowy day or perhaps hotel stall going out of their way to carry bags even for short distances. To me at the time this seemed very obvious but the topic came up in class and some experienced these techniques unnoticed. During the break of a class discussion a friend admitted that her family wound up buying dozens of carpets and lamps after a Turkish store owner offered her family some tea, another noticed how overly familiar clerks were to people who appeared to be foreigners.

Now persuasion techniques don’t have to appear so sinister there are several ways to positively introduce them for crowd funding projects for example-

Building trust by opting to give back all the money earned from a project if it is not successfully funded in time. This is known as the ‘All or Nothing’ (AON) module and keeps patrons assured that their money will was not wasted else if the project fails to be fully funded. Cumming, Leboeuf, and Swienbacher did a study where they found-

“AON is a clear signal to the crowd that the entrepreneur commits not to undertake the project if not enough is raised, [which] reduces the risk to the crowd…KIA projects tend to be less successful, since the crowd bears the risk that an entrepreneurial firm undertakes a project that is underfunded and hence more likely to eventually fail.” (2014)

Below is a chart showing 47,138 projects on Indigogo (another crowdfunding platform) and number of successful projects that chose the ‘All or None’ module instead of the ‘Keep it all’ one.

HGFD

 

I feel that if you truly believe in your project and do the right amount of social media campaigning it is possible to fully fund your project and choosing to give back the money if you cannot, may actually help build a community that will later trust you with future projects.

References:

 

AON [Digital image]. (2017, August 17). Retrieved December 10, 2017, from https://conversionxl.com/blog/crowdfunding-campaigns/

Kolenda, N. (2017, August 17). Crowdfunding : Strategies & tactics. Retrieved December 14, 2017, from http://nuvopreneur.com/crowdfunding-top-strategies-tactics/

 

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