The Price Is Right

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Last October, a woman named Spike launched a Kickstarter project to fund a comic called Poorcraft. It wasn’t all that different from other comic projects that launched at the time, but this one found enormous success, finishing 227% funded. Why?

There are many factors, but one in particular stands out: how Spike priced her rewards. Spike set the price of a signed comic book at just $10, a reasonable amount for the nearly 500 backers who opted for it. Spike found the majority of her support from lower tiers: 83% of her $13,600 came from pledges at $50 or less.

A key factor in a project’s potential success is how its rewards are priced. The PBS-style fundraiser would have us believe that tote bags should cost $100 and Ken Burns DVD sets $400. There’s an assumption that the act of sponsorship carries a tax: “Because of your generosity, items are marked at four times the sticker price.”

But Kickstarter isn’t charity: we champion exchanges that are a mix of commerce and patronage, and the numbers bear this out. To date the median pledge is $25. Small amounts are where it’s at: 83% of successfully funded projects have a reward priced at less than $20. It’s not about hunting whales, it’s about amassing support.

What works? Offering something of value. For $10 a backer should get something (a product, an experience, access, etc) in exchange. What doesn’t work? Charging a premium. Projects without a reward less than $20 succeed 35% of the time, while projects with a reward less than $20 succeed 54% of the time.

That’s not to say Kickstarter projects must mirror a retail experience. There are infinite possibilities to do something creative and outrageous at all kinds of price points. But it’s important to consider the actual value of what you are offering.

Actual value considers more than just sticker price. If it’s a limited edition or a one-of-a-kind experience (writing a song for someone, etc) there’s a lot of flexibility based on your audience. But if it’s a manufactured good (DVD, CD, book), then it’s a good idea to stay reasonably close to its real-world cost.

Every Kickstarter project is an economy sculpted by its project creator. They set the prices and the rewards. But the larger market has a voice, too. Things like what an item might cost in a retail setting, what potential backers see as a fair or fun exchange, and even how other projects might price items. Creators ignore these forces at their own risk.

There is no magic bullet, and we encourage every project to be as creative and true to itself as possible. But there are lessons to be learned. Offer rewards of real value and be fair with your pricing. Put yourself in your backers’ shoes: would you drop the cash on your rewards? The answer to that question will tell you a lot about your project’s potential.

Comments
    1. Shah Afshar on

      Thanks, This really helped.

    2. Claudia Perry on

      This is helpful.

    3. Layla Kilolu on

      Thanks for the tip! I am really excited about getting started on my project! :)

    4. Michaelangelo Rodriguez on

      I like this idea a lot. I'll use it!

    5. Insult Skateboards on

      Thank you very much for the tips. I am sure this will help us.

    6. Chris Kohout on

      This sounds good, but I'm wondering how she had anything left of a $10 donation after printing a 120 page book, packaging and shipping it out?

    7. michael morales on

      thanks for the help

    8. OMO MISHA on

      awesome advice!

    9. Katie Rubin on

      Thank you! That's super helpful! Blessings! Katie Sabira

    10. Lou Derr on

      Excellent advice. As I am almost ready to start my new project. Lou Derr

    11. Jymeni Productions, LLC on

      Thanks a lot! i'll be using this when getting my page together! :D

    12. Mae Scott on

      Thanks for the light

    13. Cedric Lee Bradley on

      Thank you got to go do some brainstorming!

    14. Dave Garrett on

      This has been helpful... as well as watching the videos of others( both successful and unsuccessful). My project has been accepted and now I am in the process of figuring out rewards, and how I'm going to do my video. Thanks for the tips.

    15. Ken Gregg on

      Very helpful Yancey, thank you.

    16. Vlada Tomova on

      Very helpful - made up my mind!

    17. Joanna Harcourt-Smith on

      Thank You for making this available ... very helpful !

    18. Missing avatar

      STEVE on

      we can make it work

    19. LeAndra Shipps on

      Thank you so much for the advice. One piece of advice can turn the world.

    20. Kevin A Hickling on

      Very informative, thank you.

    21. Mike on

      Thank You! I just readjusted all my rewards

    22. Todd Monaghan on

      This is enormously helpful! tm

    23. StraightValue on

      Kickstarter staff are true disciples of candor and service to others. Let us all mimic in our own way.

    24. Destenee Mckenzie on

      Amazing! Thanks for the tips!

    25. Gary Wagner on

      This comment has been removed by Kickstarter.

    26. Steve Robinson on

      Your advice is greatly appreciated and I'll do my best to heed it. You have had such success with your program that it would clearly be a mistake not to do so.

    27. Mike Lowther on

      Thank you!! This was MUCH needed! :)

    28. Carl Dancy on

      Excellent advice. Thank you.

    29. Lawrence Taylor on

      Glad I read this before taking the leap into rewards. I'll have to convince a partner too!

    30. Missing avatar

      ryan ewell on

      good to know! thanks

    31. Missing avatar

      TLucas7 on

      excellent marketing advice. i will take it and learn greatly from it.

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      deleted on

      This user's account has been deleted.

    33. Sandor Nagy on

      THANK YOU! I'm going to use this info to set up my reward-system. You guys rock!

    34. Missing avatar

      deleted on

      This user's account has been deleted.

    35. Missing avatar

      Myrna on

      This is fabulous. I've already made adjustments...thank you!!!

    36. Movement for the Urban Village on

      Thanks for the tip! I am re-formulation now!

    37. Freda Pongetti on

      This was really helpful. Thanks a lot!

    38. Al Barbosa on

      Thank you this helped me put things in perspective.

    39. Caroline Ledgin on

      This was great advice that I plan to use today! I will be launching this week and I feel lucky to have read this now.

    40. Veronica L. Shealy on

      Great info! Thanks a bunch!

    41. GODFREY YOUNG on

      THANK YOU SO MUCH FOR THE INFO.

    42. Drake and Sofia on

      wow this probably just saved our project from being a failure... thanks :)

    43. Felix Leo Campos on

      Too often the "little people" aren't thought of. Historic references provide examples of people being undervalued and ostracized from a share of the gains. Our event, fortunately for those "little people", was created with your consideration in mind. Which is why our price is as low as it is.
      It is good to know that we're not the only ones who are as considerate.