So you’re launching a new crowdfunding campaign, and you’re not sure how to reward your backers? Read on for five important points to consider as you make your final decision:
1: Pad Your Bottom Line
Startups who crowdfund are notorious for overextending themselves. Unexpected production costs, shipping surcharges, and factory errors set creators in the red. So the #1 rewards structure rule is to make your margin large enough to swallow unforeseen costs.
2: Incentivize Backers to Convert Early
Early momentum translates to press hits and promotions, so it’s important to get your campaign moving quickly. Keep backers from waiting until the last minute to pledge by creating a rewards structure that promotes a sense of urgency. You can do this by offering an extra discount or special add-ones to early backers.
3: Offer Just Enough, but Not Too Much
Strike a careful balance between a reward worth taking the “crowdfunding gamble” for, and a believable discount that doesn’t attract bargain hunters. Bargain hunters are unlikely to become long-term customers, and steep discounts can discourage backers who have seen too many crowdfunding scams. Many successful campaigns price their rewards between 15 and 30% off MSRP.
4: Consider Offering Free Shipping
If you can, consider offering at least free domestic shipping. Unexpected shipping costs can lead to last-minute cancellations. And in the era of Amazon Prime, many consumers actually expect free shipping.
5: Offer REAL Rewards
No one is going to pledge to your campaign just for a t-shirt or hat with your company logo on it. Your rewards should all be focused around your actual product — even if that means a longer delivery timeline.
Need more help creating your rewards structure? Consider taking our Crowdfunding 101 course for an in-depth look at everything from setting your quantities to determining your price point.