Kickstarter and Indiegogo are “rewards-based” crowdfunding platforms, meaning creators offer tangible rewards, or products, in exchange for money they’ll use to bring the product to life. What you offer, and at what price, can encourage or detract potential backers. To make sure you do it right, read Enventys Partners’ top five tips for structuring your rewards.
5 Golden Rules When Creating Your Crowdfunding Rewards
When starting a crowdfunding campaign, one of the most important parts of the process is brainstorming your rewards. Rewards are the tangible product or service you offer the earliest supporters of your idea. How you structure your rewards can make or break your entire campaign. Make them too complicated and people won’t invest the time needed to understand your project. Offer too many options, and people might decide just to skip it altogether. Rewards are notorious for making or breaking an entire campaign, so here are five of our best tips and tricks for structuring your rewards for a successful campaign.
1. Keep it simple.
The biggest thing to note when structuring your rewards is to keep it simple. It’s easy to get carried away with bundle packs and additional accessories. In our experience, creators find little to no success by adding multiple bundles to reward structures.
Simplicity is best.
It can be difficult when potential backers want to support your campaign but can’t understand what they’re putting their money into. This often results in a lost pledge and reduces the overall support for your campaign. Be clear and concise when structuring your rewards and make them easy to understand.
2. Make a plan.
Take the time to create a set plan for your rewards structure well before launching. It’s important to create different tier levels that phase in during your campaign. We recommend having a total of five rewards open on your page at a time.
Creators are also encouraged to offer three different pricing tiers during their campaign:
- Super Early Birds — The lowest price point you’re willing to offer your backers. These are typically open for the first 48 hours, though some creators leave these open longer.
- Early Birds — This reward tier will open up after the Super Early Birds closeout. We recommend leaving these open for the rest of the campaign.
- Regular Prices — We consider these our price anchors and recommend leaving these open during the entire campaign!
If at any point during your campaign you feel engagement has either dropped off or the campaign is doing so well that you’re able to run a flash sale, do it! Flash sales are a great way to boost momentum for a short period of time.
3. Be realistic.
Whether you’re creating your first or fifth campaign, it’s important to stay realistic with yourself. Crowdfunding campaigns are designed to help creators cover their production costs, not make millions in net profit. Set practical goals for your campaign and align your rewards with them. It’s easy to get lost in setting high margins for your product but make sure they are justifiable.
Be transparent with your backers about pricing and what those costs will be used for. Crowdfunding backers are savvy, and they’ll let you know if your product is priced too high.
While you shouldn’t be out to make a massive profit, you do want to set your prices so that you can cover your production costs. Offering rewards means you’ll have to fulfill them.
When structuring your rewards, we often advise starting with the lowest price possible for the first 48 hours of your campaign. Sometimes creators will take a loss during this period. Make sure you’ve run your financial models and are prepared for that loss, knowing it can be recouped later in the campaign.
4. Consider your shipping and quantity limits.
Shipping costs can be one of the biggest turn-offs for a potential backer when it comes to rewards. High shipping costs can make or break a campaign and it’s important to realize that no one enjoys paying for shipping. If international costs are unreasonably high, consider keeping your campaign limited to domestic shipping only and look into better international prices once your campaign has ended. Another great tip for high shipping costs would be to build some of the shipping prices into your rewards, adding $10 to a reward tier with $5 shipping looks a lot better than a cheaper reward with $15 shipping.
Another great tool to use during your campaign is quantity limits. These create a sense of urgency and exclusivity for backers to support your campaign. Quantity limits are also great for helping you keep track of your rewards.
5. Offer add-ons.
Add-ons are a great way to generate additional money for your campaign. They allow backers to purchase accessories for your product, add additional products to their pledges and more. Using add-ons keeps the reward tiers simplified while still allowing creators the flexibility to offer a variety of products.
We know creating and structuring rewards can be overwhelming and confusing. Whether you need help structuring or managing rewards for your campaign, Enventys Partners can help! Reach out to us to get started.
Work With Us
Want to learn more about how we’d prepare your product for launch? Request a quote today.
Want To See This Advice In Action?
Check out our case studies and learn more about how we’ve achieved stellar results for our clients.