A stretch goal is one of those terms that is often thrown around the crowdfunding community. Most people have heard about them, but do not necessarily know how to use stretch goals to their advantage. Stretch goals have the potential to generate additi …
A stretch goal is one of those terms that is often thrown around the crowdfunding community. Most people have heard about them, but do not necessarily know how to use stretch goals to their advantage. Stretch goals have the potential to generate additional funds for the creator and introduce new features to the backers.
What is a stretch goal?
Stretch goals are set by the project creator to surpass the original funding goal of the project. More money through stretch goals often means cooler stuff. Typically you will see new colors being unlocked or personalized features being delivered to the backers. Funds are collected whether stretch goals are achieved or not, as long as the project hits its official funding goal.
Are stretch goals a good idea?
Adding additional features or extra functions while funding more money seems like a win-win. However, in all-or-nothing crowdfunding, this can make things complicated. Adding unplanned moving parts to a project can put the creator in a state of overwhelmedness. Stretch goals create the possibility of interfering with both the project’s budget and schedule.
Therefore, stretch goals almost act as a double edged sword because while they bring new backers to fund your project, they also put it at risk. It is important to remember that delivering to and connecting with your backers is often more valuable than funding “extra” money. That is why having a structured plan is a must with any form of crowdfunding.
More Money, More Problems
Some people wonder where “extra” funds go in a crowdfunding campaign when the project notably surpasses its funding goal. Well, that “extra” money isn’t like lottery winnings. For instance, if a project has a funding goal of $20,000 but raises $100,000, that does not mean the creator can take a tropical vacation with the $80,000. Instead, the creator will be busy satisfying rewards for its backers and will have less room for error.
In the world of crowdfunding, there are large number of projects that end up doubling, even tripling their original funding goal. Since some projects are in the early stages of production, creators often use those funds to improve the project’s end product. Manufacturing processes can be improved, as well as the introduction of higher-quality materials.
So for backers, more funding usually equates to a better made product. For creators, overfunding means their project makes a profit. Both are great outcomes. But, keep in mind that stretch goals exchange long-term risk for a short-term reward. So be careful!
One of the biggest fears of a crowdfunding campaign is not delivering to your backers. It is necessary to do your research and make sure you have the proper resources in place to carry out anything you promise to your backers. Create stretch goals that would compliment your project and make it more desirable to the potential backers. You will want to create the most value to the crowdfunding community at the lowest possible price. Sometimes the little things can go a long way. If creating new features or colors introduces the possibility of sinking your entire project, then don’t do them. Also, don’t let stretch goals extend the fulfillment period or increase shipping costs. Backers are already patient enough with delivery dates, and there is no need to make them wait any longer. Shipping costs are high enough and making your backers pay more is not a good idea.
Plan, Plan, Plan
Generally, at the beginning and end of your campaign, you tend to see higher spikes in backing. The middle of your campaign is where any campaign can begin to lose momentum and plateau. To maintain that early momentum, it is a good idea to announce new updates connecting with the crowdfunding community. Stretch goals work to perpetuate the velocity of funding and will keep your backers excited. There is no better publicity for a project then a bunch of buzzing backers.
Does this mean that you should craft stretch goals seeking astronomical amounts during the first week of your campaign? No, make sure your project is fully funded before you announce any updates regarding stretch goals. Remember, the campaign is a marathon, not a sprint.
At the end of the day, crowdfunding boils down to getting your brainchild funded. There is not a magical universal strategy that works for every project. It is necessary to evaluate your goals for the project to decide if stretch goals are for you. Stretch goals have the chance to propel your project into the stratosphere, but this comes at a risk.