The Secret to Improving Customer Relationships? Take Out a Small Business Loan!
Updated: Jan 11, 2022
Two of the biggest issues facing you might be facing as a small business owner are accessing the funding you need to grow their business and improving your relationships with your customers to generate more return visits and build a sense of community around the business.
Well, Honeycomb Credit helps businesses solve both of these problems in one fell swoop. Through the power of loan crowdfunding, you can turn your customers into brand advocates who love your business and help you reach new levels of success!
The difference between investment crowdfunding and reward crowdfunding for customers
Think about the last time you saw a local business in your community running a Kickstarter campaign. Sure, the project is compelling, you know you like the business, you might throw a few bucks their way, but would you be willing to kick them $500, or $1000?
Probably not. This is because rewards crowdfunding only offers “perks” to people who contribute to them, and there’s no way that you’re going to get that money back.
And as a business owner, is that how you want to be perceived by your customers? Business owners often don’t want to promote their reward campaign, seeing it as panhandling and annoying their customers. This creates a negative feedback loop, and the owners wonder why their crowdfunding campaign isn’t doing well.
Well, that’s the main difference between loan crowdfunding and reward crowdfunding. Instead of asking your customers for money, you’re giving them money by asking them to invest in your business. When your customers invest in you, they contribute to your crowdfunding campaign and later get their money back, plus interest. On your part, you get the money you need to grow your business, and you get improved customer relationships - because who doesn’t like the people who give them money?
From the moment your customers invest in your Honeycomb campaign, their support of your business grows. Monique Figureido, owner of Compostable LA, noticed this when she ran a Honeycomb campaign in 2020: “As an entrepreneur, it can feel kind of lonely, it can feel like you’re on this journey trying to build something, and you don’t know if you’re a little bit crazy, or if anyone else is into it. To receive this very visual outpouring of support, it shook me in a way.”
How to turn your customers into brand advocates
When a business runs an investment crowdfunding campaign, the customers who invest in them become so much more than just a regular customer. We call them “brand advocates” because they’re no longer just spending money at your place - they’re hyping up your business to those around them.
Characteristics of a brand advocate
1. More likely to come to your business and spend money there
Your brand advocates become better customers after they’ve invested in your campaign. This is because now that they’ve got a financial buy-in to your business, your success is their success, and they want to see you thrive!
We’ve had report after report from small business owners who’ve told us of customers who’ve invested in their campaign becoming regulars at their businesses. They do their holiday shopping there, bring family and friends to check out the place, and come more frequently on their own time. This contributes to the fact that on average businesses that crowdfunding with Honeycomb increase their year-over-year revenue by 60%!
“In some cases, the investment campaign itself was enough to make people into customers. “During the campaign, there were people who would visit the property and visit the site because they’d been exposed to the campaign and were interested. Even this last weekend, we had people that have come in, they buy stuff at the gift shop and they tell us, ‘You know, we're also investors.’” says Kevin Thomas, owner of Western Reserve Distillers in Cleveland.
2. More likely to promote your business to their friends
Another feature of brand advocates is that they, well, advocate your brand!
Customers who invest in your business are more likely to shout your business to the rooftops and recommend you to anyone they know who might be interested in you!
After running a Honeycomb campaign, businesses on average see a 40% increase in Google and Yelp reviews and an 80% increase in press mentions. This, combined with the power of word-of-mouth from your brand advocates, can translate into some pretty substantial new business!
3. Brand Advocates can facilitate professional connections
Sometimes, your brand advocates can be friends in high places - or just friends on Main Street that you might want to collaborate with. When you join the Honeycomb community, you get access to our investors who often have connections to other businesses, real estate, and other ways to build your business.
For example, Joe Robl, co-owner of the Pittsburgh PIckle Company notes, “One of our investors actually runs a small grocery store downtown in Market Square. He’s starting to carry our products, and we might start making products for him. So it’s snowballing into something quite nice.” Pittsburgh Pickle Company crowdfunded $50,000 from their community in order to buy equipment to expand their artisan pickle business!
4. Stronger personal attachment to the business leads to long-lasting relationships
The fourth, and we think most important, characteristic of a brand advocate is that now they have not only a financial attachment to your business, but also an emotional one. It’s a powerful feeling to be a part of a business you love’s growth, and those feelings can last a lifetime.
Marvin Bowe, owner of Swedesboro Brewing Company, opened the very first brewery in his community, and he found that the members of his community who invested in the brewery feel a special way towards it: “ In fact, the investors are now part of the business, and now they feel that it’s their brewery, which was the most important thing about investing today,” he says.
Get closer to your business’s goals and to your customers
A Honeycomb campaign is powered by your people, and levels up your customers in the process. Give your customers the chance to invest in your growth, and you’ll be celebrating with them for years to come!
Learn more about running a Honeycomb campaign by filling out the form below: