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Interview with Fabio Allegreni, contributing author to the first global book on crowdfunding: Crowdfunding for Sustainable Entrepreneurship and Innovation

Crowdfunding as a New Tool for Enhanced Marketing

By IGI Global on Sep 2, 2016
Interview with Fabio Allegreni While crowdfunding is definitely a way to help enterprises raise funds, it may also be considered as a powerful marketing tool. Indeed, if marketing is a way to meet the needs and provide benefits to people, crowdfunding can do the same. Depending on the way a company approaches and exploits them, both reward and equity crowdfunding can give a wide choice of alternative options for achieving the typical marketing objectives, particularly related to two out of the four marketing P’s: product and promotion.

This is the central thesis of Fabio Allegreni - partner of the Italian consulting firm Crowd Advisors - in his chapter, “Crowdfunding as a Marketing Tool” contributed to the new book Crowdfunding for Sustainable Entrepreneurship and Innovation, edited by the economist Walter Vassallo and published by IGI Global. The book will be officially launched at Crowd Dialog Europe on September 8 in Graz, Austria. Editor Walter Vassallo interviewed Fabio to help us better understand his unique views on crowdfunding.

Can enterprises raising funds through a crowdfunding campaign accomplish additional strategic objectives that go beyond fundraising?

Yes. This is especially true for reward crowdfunding campaigns, where marketing goals can have an even higher priority than fundraising. For instance, testing a new product by letting backers pre-order it, before putting it into production, is a great way to evaluate its market approval. Also, a reward crowdfunding campaign can be exploited for entering a new market, launching a new product or even strengthening the relationship with customers.

Is this true also for equity crowdfunding?

Equity crowdfunding campaigns may pursue a side marketing goal, indeed. It may concern the financial strategy by setting the base for further future funding rounds or increase credit worthiness. However, it also deals with the company’s products or services strategy. Actually, a company may look for entering a new market, or finding commercial or industrial partners.

Are marketing opportunities limited to enterprises using crowdfunding to raise funds?

I believe (and the market is proving it) that it is an opportunity even for medium and large corporations that invest funds, provided they hold a relevant marketing budget. They may look at crowdfunding as a more efficient or additional way to implement their marketing strategies.

Investing in reward crowdfunding campaigns can be a powerful tool for increasing a corporate brand equity. This is especially true when a corporation is a pro-active investor, meaning that, for instance, it supports a program for financing selected initiatives as long as they reach a share of their funding target. People will associate the company’s brand to its commitment in supporting the development and growth of new enterprises. Another way a corporation can leverage on reward crowdfunding investing is to scout new technologies or products, by stimulating either external or internal initiatives.

How can the investment in the equity of a startup be turned into a marketing activity?

Investing in Start-ups or SMEs by buying their shares, offered through an equity crowdfunding campaign, enhances the acknowledgement of the same objectives I mentioned before. Instead of concentrating the whole R&D funds on expensive internal teams, a corporation may also acquire a stock of one or more promising business, thus controlling more closely their ability of developing new solutions. In addition, interesting Start-ups or SMEs can become commercial or financial partners whenever their offer is complementary to the investor’s one.

The advantage of implementing such strategies by scouting opportunities on equity crowdfunding platforms, rather than directly, is a matter of time and money: not all companies can afford an expensive due diligence on a large number of small companies, which, conversely, equity crowdfunding platforms facilitate.

What kind of evolution are we likely to expect for the future?

The opportunity crowdfunding offers as a marketing tool depends of course on a company marketing strategy, but it also relies on the ability of management or entrepreneurs to catch it by taking marketing decisions with an open mind.

On the other hand, crowdfunding is still at its early stage and, especially equity crowdfunding has not expressed its full potential yet. Nevertheless, it is fast growing in the US as well as in Europe. This will certainly give rise to new ways of exploiting it as an even more powerful marketing tool. As more enterprises and initiatives will list on crowdfunding platforms, and the more both individuals and corporations will get used in investing in growing businesses, the higher will be the potential of using crowdfunding for pursuing marketing objectives.
Fabio Allegreni is an entrepreneur and a digital media adviser since 1997, with a main focus on projects increasing the company assets value through converged mobile, web, social networks, e-commerce. He has an extensive knowledge of the media industry including Internet, social networks and mobile technologies, and his track record includes digital media projects development for large corporations, as well as business development advisory for start-ups (having also launched several tech start-ups each with a successful exit). Several years ago, Fabio founded Crowd Advisors, a consulting firm specializing in advising startups, SMEs and PA on fundraising, with a special focus on crowdfunding and crowd economy. He also publishes Crowdfunding Buzz, the first Italian online magazine dedicated entirely to crowdfunding.

Related Posts:
- Predicting the Future: How to Anticipate Needs and Create New Business Models and Revenues- Interview with Walter Vassallo
- Book Launch Party to be Held at Crowd Dialog Europe 2016
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