Monday, September 15, 2014

The Value of Small Business Saturday

I don't like "Shop Local" campaigns.  There, I said it.  I know that many are big fans of the concept and that having a "Shop Local" campaign has found its way into a lot of Main Street Promotions 101 Playbooks, but I don't believe it has the value that it once did.  Over the years, I've learned that while you do need to get your community's attention and focus on downtown in the beginning, they will continue to come back for the business offerings and special events because they enjoy them and provide things that they are seeking, not just because you told them to "Shop Local".

Before you Google it, yes, Downtown Rochester did have a "Shop Local" campaign back around 1999.  It was cute, kinda cool, but also a bit of a one-trick pony.  Almost every downtown, either directly or indirectly has been doing shop local stuff for years.  It was supposed to be the wake-up call to our residents to let them know that they should consider shopping downtown first.  A strong message and a noble cause, and a lot of people took notice, including national retailers.

Yes, those big-box retailers started trying their hand at the shop local game too, with a goal of getting shoppers off the Internet and into their stores.  Shop local, as cool as it is, just doesn't mean the same thing that it used to.  Like "great customer service", it has become a vanilla version of what it was originally meant to be and its long-term effectiveness for downtowns is slight, at best.

And then along came American Express and little marketing campaign called Small Business Saturday.  Let's be clear, AMEX created Small Business Saturday for one purpose - to increase engagement with small business owners and encourage more to accept American Express.  But like many great ideas, it has taken on a life of its own and has gone way beyond just an AMEX promotion.

It's like the classic "Shop Local", but the message is more direct - "Shop Small".  And we all know that timing is everything, so it was strategically positioned between holiday shopping icons Black Friday and Cyber Monday.  Yes, independent businesses finally found a place on the stage in the big show of the holiday shopping season.  And just like you experience either feelings of excitement or horror when you think about Black Friday, Small Business Saturday is much different.  It's relaxed, friendly and very downtown.

And because small businesses typically can't compete with the chains on price, they have found a way to capitalize on this day in a very grassroots, very Main Street kind of way.   From special in-store entertainment and refreshments to drawings and  shopping passports, businesses have discovered the secret of the success of Small Business Saturday - it is exactly what their customers have been looking for all these years. 

Case in point, I always go Christmas shopping on Black Friday.  I'm not one of the out-of-bed-at-the-crack-of-dawn shoppers, but I started doing it with my Mom and Grandma when I was a little girl and I feel like it is a holiday tradition engage in a little weekend after Thanksgiving shopping.  Black Friday has become for me and many others, one of the most repellant shopping campaigns in the history of the world.  If you live for the discounts and don't mind waiting 2 hours in line to buy a $10 flat screen television, then knock yourself out. 

But I know that there is another group of shoppers, much like me, that do want to do some holiday shopping that weekend, and we want to do it downtown.  When we ventured downtown on Small Business Saturday last year, we enjoyed shopping in our businesses, maybe getting a cookie or taking advantage of some free gift wrapping.  But I wasn't looking for a sale, I was looking for that holiday shopping experience that  had been swallowed up by the "Open on Thanksgiving, 90% off mentality" that gets all the media attention.  And I absolutely found it, along with millions of others that shopped on Small Business Saturday.

Yes, there are plenty that cast shade on American Express for creating this campaign, complaining that they are profiting exponentially.  Well, if that is the cost of putting the spotlight on small businesses at the most crucial sales weekend of the year, then I'm good with that.  In 2013, $5.7 billion was spent in small businesses on Small Business Saturday, so I think it's fair to say that it is here to stay.  If you haven't signed up your downtown yet, do it today!  I know we all have plenty to do, but add this one thing to your to do list.  You won't regret it, and your businesses will thank you.

See you downtown!

The Downtown Geek

Tuesday, September 9, 2014

How NOT To Run A Crowdfunding Campaign

I know that I love to share best practices and success stories, but sometimes you learn more from your failures.  And that is what inspired my latest article for Main Street Now, all about my fantastically terrifying journey into the mystical land of crowdfunding.  A few people had trouble accessing the electronic file that I shared via The Downtown Geek, so I decided to repost it here.  It's a bit longer than my usual blog, but absolutely worth the read!  Enjoy!

How NOT To Run A Crowdfunding Campaign

Okay, maybe that’s a little harsh.  At the end of the day, our crowfunding campaign was successful so I guess it wasn’t all that bad.  As with most epic stories, it is always best to start at the beginning.  

Last year, when we received our bids for our annual holiday lighting event, The Big, Bright Light Show, we were stunned and bewildered when the lowest bid was 2 5% higher than the previous year.  Did I mention it was the end of August and installation begins October 1?  There was absolutely nowhere in the budget to find the extra money that we needed.  We didn’t have time to reissue the RFP and we couldn’t postpone the installation date because they need every day possible to install the 1.5 million lights, so we were in a quandary.  

We seemed to have two options – downsize the show or find the money somewhere else.  I couldn’t even stomach the idea of going to our business owners on Fourth Street and telling them that, through no fault of their own, they were not going to have lights this year.  Since that was now off the table, I was left with only one option – fundraising.  We brainstormed for days trying to come up with a winning idea.  Merchandise sales, big membership drive, additional sponsorship opportunities were all put on the table, but we needed to raise $25,000 and we needed to do it fast.  It became clear that there really was only one viable option – crowdfunding.

I had done my research on crowdfunding a long time ago and identified it as a definite possibility for us from a fundraising standpoint if the right project came along to try it out.  It was never my intent to take our largest, most important event and use it as a crowdfunding guinea pig.  But the days were ticking down and we were running out of time.  And so it began…

First, we had to decide on the platform.  In my research, I identified Indiegogo and Kickstarter as our best options.  Kickstarter had the high profile brand recognition, so that’s the direction we decided to pursue.  As we started to build our campaign, there were two key things that we needed to make our campaign effective – exciting donation rewards and a compelling video.  

So we started with the rewards.  It became apparent rather quickly that without a large quantity of cool rewards at various donation levels, it would be over before we even got started.  We had some merchandise, but not the quantity or variety needed for this type of campaign.  We couldn’t afford to buy any items to offer as rewards because that would be counter-productive and increase the amount of money we would have to raise to offset the new expenses.  So we went to the merchants to seek donations – and they jumped on board immediately.  We had everything from gift certificates and jewelry to spa treatments and music lessons.  We were on our way.  Now all we needed was a cool video.

When we sent out the request for donations, we received a call from a local videographer who saw our request and wanted to know if we could use any video services?  Ah yes, things were falling into place nicely as we made a new friend at Third Street Films and our video was ready to go.  All that was left now was to load everything up on Kickstarter for their approval.  Simple, right?  Not exactly.

The process of uploading everything to the site was very user-friendly and was ready to go within a day.  So we pressed “Submit” button and we waited.  And waited.  In their extensive guidelines, they did say that it would take up to a week to get a response, so we weren’t too worried.  About 3 days later, we finally received an email from Kickstarter…at 3:30 am.  I discovered it when I got up the next morning.  They had concerns about how we chose our category “Art” for the project and that we needed to provide an explanation before we would receive approval.  Truth be told, there was absolutely nothing else that fit us so that’s how we ended up in that category.  But I really couldn’t tell them that, so instead I spun a yard so wide and grand about the “historic buildings are our canvas and the lights are our paintbrush…” (Yes, I know, I’m going to hell, but I needed to raise some dollars and failure was not an option.)  So I sent back my creative writing piece and I waited. 

And we received a response the next morning…at 2:30 am.  Now they approved the category, but had a problem with all of the “third-party rewards” because we cannot involve other businesses that are not receiving a direct benefit from our campaign and all of those would have to be removed if we wanted approval.  Without those rewards, we were sunk.  So I got out my creative writing cap once again and explained, truthfully, what our organization does and that we are representing all these businesses that would absolutely benefit from our campaign.  I challenged them that while this was a bit out of their strike zone, Main Street communities are a huge potential market for their services and wouldn’t it be great to use us a pilot project to see what would happen.   I hit send and waited.  And waited.

We waited for another three days.  I resent the email, sent notes to the help line.  I would have called, but Kickstarter doesn’t have a published phone number so that was super fun.  Finally, we had to make the call, we were planning on running the campaign for two weeks and we had to pull the trigger now.  So after all the time invested, we made the switch to Indiegogo which we knew didn’t have the name recognition, but you could pretty much create a campaign to send your gerbil to college and they would approve it, so off we went and launched on Indiegogo.  Almost exactly 8 hours after we launched, we heard from Kickstarter.  Ugh.

They loved the idea of using us a pilot program to test this downtown market and gave us their blessing.  So now what?  We had raised about $1,500 so far on Indiegogo but if we were considering making the switch, we had to do it now.  Within about 20 minutes, I knew what the right (yet painful) decision would be and I switched us over to Kickstarter.  Now the real fun began.

And when I say fun, I mean my worst nightmare coming true.  Remember when I said that I didn’t want to use The Big, Bright Light Show as the pilot for this type of campaign because I knew it wasn’t a good fit.   I really hate it when I’m right.  To promote our campaign, we had to rely heavily on press coverage and social media.  On the press side, we had to portray the fundraising in the most positive way possible because the last thing we wanted to do was anything that would tarnish the reputation of the show or Rochester.  Social media was a bit trickier since people can respond to you instantly.  And oh, did they ever.  

Within the first few hours on Kickstarter, I received some of the meanest, nastiest, most accusatory comments ever.  Many people were absolutely appalled that we would dare to ask for donations for the lights when there were starving people in the world.  Okay, I get that there are plenty of other worthy charities out there.  And we certainly weren’t suggesting that you stop supporting those charities and instead give us your dollars.  So after some hard thinking and good cry in my car, I decided that we couldn’t go back, we had to keep pushing because this was too important to our businesses and our town.  So we pressed on.

Donations started to trickle in, slowly but surely.  But it was easy to see early on that this was going to be a long, painful road to success.  By the beginning of the second week, it was obvious that unless a miracle happened, we were not going to be successful.  On Tuesday, two miraculous things happened.  First, on a whim, we decided to send out an updated press release and it got instant traction from key television and radio stations in Detroit.  Secondly, we had an angel investor call and offer us $10,000.  One catch – he didn’t want to put the money down unless it would make us hit our goal.  

Our campaign was ending on Friday at noon so we had to hustle.  We worked the press, we worked our social media and by Friday morning, we were still $4,500 short of what we needed to access the $10,000 offered by our angel investor.  So while I sat in my Organization Committee telling them that I was preparing for my first professional project failure, something happened.  We got a call from our local utility company, DTE Energy, and they wanted to talk about the light show.  Needless to say, I walked out of the meeting and got on the phone immediately.  The gentleman informed me that our County Executive heard about our funding issue on the news and had called the CEO of DTE Energy and asked him to help us.  They were willing to give us $5,000 right now.  

After I pinched myself to make sure that I wasn’t dreaming, I said thank you very much and proceeded to help him make their donation on Kickstarter.  Without missing a beat, I picked up the phone and called our angel investor to see if he was still willing and able.  He was and so at 11:05 am, we officially were 100% funded.  Woohoo!

Was this the best project for crowdfunding?  Probably not.  But did the end justify the means?  Yep.  And there were plenty of lessons learned along the way.  At the end of the day, crowdfunding is absolutely an exciting tool to use and is destined to be a part of future downtown fundraising strategies, but make sure that you know your options and really take time to evaluate your pitch before you take the leap into the deep end of the pool called crowdfunding.

The Downtown Geek