One of the reasons crowdfunding works is the concept of reciprocity
That is, you’re not just asking for a donation, you’re giving something in return as well.
Depending on the platform, these are called “rewards” or “perks”.
People like acknowledgement, and despite Kickstarter’s cries of “we are not a shop”, many backers treat crowdfunding as just that – buying something well and truly in advance through the promise of crowdfunding rewards.
One of the secrets to a kick-ass campaign lies in offering kick-ass rewards
There are some best-practice ideas to keep in mind when you’re coming up with your reward levels. Here are my top tips.
1. Aim for between 7 and 10 crowdfunding rewards
Michael C. Neel did an amazing study where he broke down Kickstarter data and came up with some trends of successful crowdfunding projects.
He came to the conclusion that 7 is the ideal number of reward levels. I take that one step further and say you should have a maximum of 10.
It’s about choice. You want to offer the backer options for their money, but not so many that they get overwhelmed and confused.
7 means you can offer at a wide range of price-points, 10 means you can throw in some extras and do some earlybirds.
2. Start low, finish high
Consider a $5 level as mandatory.
You don’t really want to start lower than this as the transaction fee (charged by the payment provider and typically a fixed cost of between $0.20 and $0.30 per transaction, depending on what platform you are using) will eat too much of your donations.
If you fail to include a low-level reward band, then you are saying “I don’t want your money” to a whole lot of people.
As it stands, $5 isn’t a hugely popular level – generally backers are inclined to give you more – but you look like a bit of a selfish dick if you don’t have one.
Simply promising to keep people in the loop via “exclusive updates” is substantial enough at this level. It’s easy, so not doing it is foolish.
Equally, if you don’t have a super-high reward, you could be throwing money down the toilet.
You might find it hard to believe that someone will give you thousands of dollars for your project – and perhaps no-one will – but it’s not unheard of for people to make $5,000, or even $10,000 donations to your cause in return for a mindblowing experience or reward.
Think big, it might just pay off!
3. A $25 reward level is essential
Another awesome piece of information that came out of Michael C. Neel’s study was that the $25 level is the most popular. There is a caveat to this reward however.
You can get away with a thank you on social media, or backer updates at lower levels, but at $25, people expect something of substance. That can be a download, or a product, or an experience, but it must be of worth. Nobody wants your stupid T-shirt
4. Think strategically
Try and structure your rewards so you can hit the 10% and 30% marks as soon as possible.
For my own project, I included a reward that was worth 10% of my goal. I created the reward for one person in particular.
Because it was one-of-a-kind, and something they really wanted, I knew they would pledge for it as soon as the project was live. This meant that my very first backer bought me to 10% of my goal.
Another way to do this is to offer “earlybird rewards” – a limited number of an in-demand reward at a discounted rate.
Do your math and work out how many you need to offer at what price to get you to 10% or, even better, 30% of your goal. If you’ve planned this right, people will snap them up and they’ll be gone before you know it!
5. Digital is king
Digital rewards – particularly downloads – are easy for you, and cheap to provide. They’re also something that people want.
Don’t just offer physical copies of your book, CD, or film without offering digital versions as well.
Once again, you’re throwing your money down the toilet with unnecessary reward costs.
Even if you are planning to give away digital copies of your project free to the public down the line, consider offering your backers a download in advance.
6. Be original
Yes, studying other similar projects is a good way to come up with rewards, but original ideas sell.
Your primary goal is to make your backers think “I have got to have that!”
You are original and unique. You can come up with ideas that are also original and unique.
7. People love experiences
Whether it be coffee with a creator, an exclusive set tour, use of your space, or a backer-event, people love to be part of something.
A simple and effective way to do this is to offer an experience. You can limit the number of people able to take part, and you can always price an experience highly.
Experiences are generally pretty cheap to provide, and nearly always an attractive option to your backers.
The key to a successful project lies in awesome rewards. Projects with only one reward tier rarely fund. Get creative and have fun with your crowdfunding rewards – they are literally the key to your success. What’s your number one favourite reward?
