Lessons from Kickstarter Part 2: Rewards

by Suw on February 16, 2012

This is Part 2 in my series of blog posts looking at the lessons I learnt doing a Kickstarter project. See also Part 1: Don’t Go Off Half-Cocked.

Rewards. These are one of the most important aspects of your crowdfunded project and getting them right is essential to your success. Getting them wrong, on the other hand, can not only mean that it’s harder to find supporters, but also that you might succeed with a millstone around your neck. So, a few thoughts to help you think about your reward levels:

1. Understand how much work is required to create each reward
Coming up with ideas for what sorts of rewards you can offer is the easy bit of planning your rewards. But you also need to know in great detail how you are going to produce each one.

One mistake I made when doing Argleton was that I decided to cover some of the hard-backs in silk. It took something like nine prototypes for me to figure out exactly how I was going to make them. It then took hours to cut and bond the different pieces of silk, then to embroider them and add the backing paper ready for binding. It was a huge amount of work and I hadn’t realised before I added the silk covers as a reward that they would be so time consuming.

I should have completed the prototypes and had my manufacturing plans nailed to the floor before I launched the project.

2. Limit handmade rewards
I was lucky with the silk-covered hardbacks of Argleton: Only 14 people pledged at that level, and that was about the limit of how many I could realistically make in a reasonable amount of time. If even another ten people had wanted this reward, it would have caused significant problems.

I should have limited the number of silk-covered hardbacks OR I should have had another way to produce those rewards.

3. Beware the low value, labour intensive reward
For a while, I toyed with the idea of including a hand-made lace bookmark as a reward level, but when I thought about how much time it would take me and how much its perceived worth would be, I realised that it was a bad idea.

I’ve seen and heard of projects where creators have offered beautiful little hand-made trinkets at a price point that actually jeopardises the project. If you offer something that’s low value but labour intensive, you risk firstly not paying for your time (it’s not enough to just pay for the materials), and secondly also risk annoying your supporters because of how long it takes you to fulfil your promise.

4. Prepare for runaway success
How do you scale up your rewards if your project is wildly successful? With some rewards, it’s easy enough to simply order more. But with others, does a bigger order have an impact on your supplier? For example, with Queen of the May, my next project, I will be offering a leather-bound edition. If I outsource that to a bindery, they will have the same scaling issues as I would if lots are ordered.

Check with suppliers about how bigger numbers will affect their ability to fulfil your order. If they foresee a problem over a certain order size, make sure you limit the number available to your backers.

5. Make use of non-physical rewards
One way to extend your rewards is to add non-physical rewards. With books this might be an ebook version, an audiobook version, or some other downloadable media. If you are working with an illustrator or designer, for example, why not give backers high-rest digital versions of the illustrations as well as using them for a physical reward.

I did this to some extent with Argleton, but I could have done a lot more.

6. Make use of exclusivity
Different reward levels aren’t just about different physical or digital objects, but also about the exclusivity of a reward. Again, thinking about fiction, this might include allowing a supporter to name one or two of your characters, or buying a spot on the dedication page. The nice thing about rewards like that are that they add value without adding cost, so they can dramatically increase the amount you raise without increasing the project costs.

I didn’t do this with Argleton, mainly because I didn’t think of it, but I will with Queen of the May.

7. Add rewards if you overfund
One fantastic project that I find myself inspired by is Rich Burlew’s Order of the Stick reprinting drive. One thing that Rich is doing which is very important is that the more pledges he gets, the more he gives his backers at all levels. By adding new rewards, either by asking people to “add $5 to your pledge to receive $new_thing” or creating entirely new reward levels, he is giving his existing backers an incentive to pledge more money. He’s also encouraging new backers to sign up by offering them more per reward level than he previously could have.

I think this is a very clever tactic, and one I hope to be able to employ with Queen of the May. I already have some ideas in mind for new rewards that I can offer people and will soon be researching costs so that if I overfund, I can add the new rewards very quickly.

8. Pricing
It’s really important to get your pricing right. This isn’t just about understanding your production costs, time and admin, but also making sure that your prices makes sense. I’ll cover budgeting in another post, but here want to talk about how prices make sense.

One important aspect of how human brains work is that comparisons are important. If you go into a shop that sells suits at the £200 price point and you see a suit at £500, it seems expensive. In a shop that sells suits at £1000, on the other hand, a £500 suit looks like a bargain. Make sure you have an expensive reward that positions you as the £1000 suit shop, not the el cheapo market stall.

You also need to think about how backers will view the spread of reward prices. Human babies naturally think logarithmically, and as adults we retain that logarithmic sense, so a reward schedule that goes up in a sort of logarithmic way feels right. Reward levels that go up in regular intervals risk feeling cheap.

Kickstarter has a blog post that looks at funding levels, and $50 and $100 levels both account for a lot of the income. But lower levels are more popular, with $25 appealing to the most people. The valuable thing about low-value rewards is that they bring in more backers which means that you have more people to ask for help in spreading the word. (Again, I’ll go over promotion in another blog post.)

Matt Haughey also has a good post with tips on using Kickstarter from the point of view of an enthusiastic backer. He goes into some detail about prices, and I found it particularly interesting when he said “I fund most projects in the $20-40 range, which I consider a “what the hell” level equivalent to a single visit to an ATM”.

Make sure that you have some ‘what the hell’ rewards that people really want. Don’t just fill up the bottom end of your reward schedule with postcards and wallpapers, make them something that people truly desire and can afford.


Next time, I’m going to talk about budgeting, an issue that’s close to my heart at the moment as I’ve spent much of the last month doing exactly that for Queen of the May. (And remember, if you want to be amongst the first to know when that project is up on Kickstarter, join my mailing list!)

Carl Morris February 17, 2012 at 1:43 am

Just wondering, how much value does the Kickstarter service itself add to the process?

As I understand it you as creator have to do all or most of the promotion work anyway. And many fans will be signing up to the service specially for your project because they’ve seen it elsewhere. So in theory isn’t the entire fundraising exercise possible on one’s own blog/site with, say, a Paypal account? And then you avoid the Kickstarter fees.

Suw February 17, 2012 at 1:45 pm

Hi Carl! Yeah, it’d be possible to do everything via PayPal, but one would have to ask why? The cost to you in time would easily eat up whatever savings you made in fees.

Whilst it’s true that you have to do your own promo, you can’t rely on just using Kickstarter to get you all the support you need, there’s no doubt in my mind that using KS or other such platforms is a massive advantage to doing it via PayPal on your own site. For one, Kickstarter collates all the pledges in one place so that people can see that others have made the same decision to support a project, and that’s an important signifier for those who are undecided. There’s also a lot admin stuff, like being able to ask supporters to provide information in mini-questionnaires, messaging and whatnot that’s useful in managing the project. Plus you have all your updates and comments in one spot.

So yeah, you could roll your own if you wanted, but it’s be more hassle than it’s worth imho.

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