Designing a Kickstarter Reward Strategy That Converts

Written by Mark Pecota

3 Data Backed Strategies That We Use On 6-Figure Campaigns

With all the mayhem involved with launching a Kickstarter campaign, reward strategy too often becomes an afterthought for creators.

I get it. There are so many exciting and hands on tasks to-do… the last thing you want to do is dive into a spreadsheet and figure out your pricing strategy. And when you do sit down to figure it out, you find yourself asking… how much should I discount? How many rewards should I have? Should I create a $1 reward? Kickstarter tells me the most popular reward is $25, is that right?

*breathe*

I’ll help answer all those questions by breaking down reward strategies we use at LaunchBoom. Better yet, these reward strategies will actually be backed up by real data and use examples from 6-figure campaigns.

Core Principles of our Reward Strategy

Before diving into the weeds, let’s talk about some high level concepts we follow for our reward strategy. Many of these principles are combined to have a more powerful effect.

Discounting

We like to define the motivation for people to back our projects in one sentence.

People looking to buy innovative products at a discount before anyone else.

This is a core principle of a strategy I like to call Reward Stacking.

Price Anchoring

Anchoring is a cognitive bias where a person’s decision tends to be influenced by an initial piece of information. The most classic example of this is the restaurant who has one $155 dish while everything else is around $25. You see the $155 dish, say “woah, that’s a lot”, then see the $25 dish and say “alright, that’s reasonable”.

Scarcity

A scarce product means that there is a limited supply. With a limited supply, humans are more likely to purchase the product because of the fear of missing out (FOMO).

Urgency

Like Scarcity, Urgency plays into FOMO but now we are talking about limited time instead of supply.

Paradox of Choice

Barry Schwartz has a great TED talk called the Paradox of Choice where he says:

“[Choice] produces paralysis rather than liberation. With so many options to choose from, people find it very difficult to choose at all.”

With this is mind, we strive to decrease choice in our reward structure to increase conversion.

Value Stacking

As price goes up, so does the value.

3 Reward Strategies

Overview

I recommend different reward strategies based on your product offering for your Kickstarter campaign. Below, I’ll dive into 3 of my favorites.

Strategy 1 — Reward Stacking (Single Product Focus)

If you are launching just one product on Kickstarter, then I recommend a simple strategy I like to call Reward Stacking. With Reward Stacking, we are offering many individual rewards that are all selling the same product. The only difference is the discount available and the time or supply available for each reward.

For example, let’s take a look how we did The Empire (raised $491,410).

Let’s break the rewards up into groups:

GROUP 1 — Single Pack Reward Stack

Launch Special — $114

  • Quantity Available: 300
  • Available Until: Midnight

Day 2 Special — $115

  • Quantity Available: 150
  • Available Until: All of day 2 until midnight

Super Early Bird — $119

  • Quantity Available: unlimited
  • Available Until: From day 2 to day 14

Early Bird — $125

  • Quantity Available: unlimited
  • Available Until: unlimited

Kickstarter Special — $155

  • Quantity Available: unlimited
  • Available Until: unlimited

We start the campaign off with our heaviest discount to reward early backers and drive early momentum. For Launch Day, we have a reward that ends at midnight and also has a limited quantity to really incentivize people to grab it before it goes away. We then bring back a huge discount (only $1 more) for the 2nd day of the campaign. Then, we open up a Super Early Bird tier that is only available until the first 2 weeks are up. After that is gone, the Early Bird opens up which is the reward we plan to sell for the remainder of the campaign. We never plan to sell the Kickstarter Special as it is only there to serve as a price anchor.

GROUP 2 — Multi-Packs

Double Pack — $215

  • Quantity Available: unlimited
  • Available Until: unlimited

Four Pack — $395

  • Quantity Available: unlimited
  • Available Until: unlimited

We’ve found the most popular multi-packs to be 2 and 4 packs. In terms of pricing these, we aim to make them a bigger discount than the best single pack offer to incentivize backers to go to the higher reward level.

Strategy #2 —No Brainer Deal

If you are selling a product that has multiple add-ons within the main product offering, you have the opportunity to use the No Brainer Deal strategy.

For example, BaKblade 2.0 (raised $316,581) had the following items to sell:

  • BaKblade 2.0 (includes 2 blades)
  • 4 Extra Blades

The variability of the 4 pack allowed us to be creative with the bundles we created. The idea we came up with was the following:

Starter Pack — $24 (Save 30% off retail)

  • BaKblade 2.0 (includes 2 blades)

Full Pack — $29 (Save 38% off retail)

  • BaKblade 2.0 (includes 2 blades)
  • 4 Extra Blades

The low price of the Starter Pack is enticing, but then you see the “Full Pack” for only $5 more and an even bigger savings off retail. This caused us to sell over 3 times as many Full Packs as Starter Packs. That’s what I call a No Brainer Deal 🙂

Strategy #3 — Value Stacking (multi-product)

If you have the ability to sell multiple standalone products, then I recommend using the Value Stacking strategy. In this strategy, we have less focus on the Reward Stacking method where the value goes down as the price goes up since the discount lessens. Instead, as the price goes up, so does the value offered.

For example, the Alpha Shovel (raised $177,496) was able to offer all the following items:

  • Alpha Shovel
  • Stealth Shovel
  • D-Grip
  • Saw with T-Grip
  • Stealth Shovel Head

So we turned these items into these bundles:

Alpha Shovel — $99

  • Alpha Shovel
  • D-Grip

Alpha Pack — $119

  • Alpha Shovel
  • D-Grip
  • Saw w/ T-Grip

2 Heads Are Better Than 1 — $129

  • Alpha Shovel
  • D-Grip
  • Stealth Head

Shovel Collection — $169

  • Alpha Shovel
  • D-Grip
  • Stealth Shove

Whole Enchilada — $189

  • Alpha Shovel
  • D-Grip
  • Stealth Shovel
  • Saw w/ T-Grip

Each bundle offered more value to the backers which allowed us to raise a significant amount of money for each one of these rewards.

Model What Works

The strategies above have been tested and work because of their roots in the marketing principles discussed at the beginning. There is a lot of room for creativity in Crowdfunding and I love that, but I highly recommend modeling what works unless you have some data to back up a new reward strategy.

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