Sales Effort Investment and the Success of Online Product Crowdfunding

In this paper, we investigate sales effort decisions for a crowdfunding market. We formulate three mathematical models for the constructed sales effort scenarios, respectively. After comparing the optimal solutions under the three scenarios, we determine the optimal sales effort strategies. We find that: 1) The project creator and the platform have stronger motivations to offer sales efforts to boost crowdfunding success when the funding goal of the project is low; 2) Compared with the platform manager, the project creator prefers more to offer sales efforts; 3) If the platform has sufficient capital, both the project creator and the platform should offer sales efforts; if not, it is better than the project creator separately offers sales efforts; 4) Both the platform and project creator prefer the sales efforts with positive interdependency; 5) More potential buyers which attracted by the platform's sales efforts will encourage the project creator to raise product price. However, the project creator will be forced to lower the product price due to its own sales efforts. Although it is universally accepted that the key to the successful launch of new products is to expand the market size, our managerial implication is that compared to the market size expansion, it is better for the entrepreneur of new products in crowdfunding environments to enhance the buyer evaluation of the product value, for example, by improving the description of product information.