The best way to get people to donate to your rewards-based crowdfunding campaign is to have interesting and valuable rewards in exchange for a contribution. This two-part series will give you all you need to know to have great rewards that give you the best chance of reaching your funding goal.
Thoroughly think through your rewards. Look at other similar successful crowdfunding projects and see what they did. Learn from their successes and use them as inspiration. Have your friends and family review your plan and ask for their input. Make sure you have a compelling story, something that will make people care, and interesting rewards that fit into your story. Here are some tips on choosing rewards that let your supporters know how much you appreciate their donation without breaking their bank.
1. If you are planning to launch a new product or service, offering it through a crowdfunding portal like Fund an Idea allows you to offset the costs of manufacturing or other costs you’re going to incur. Early adopters are often willing to pay a premium over mass market prices so they can say they were the first to try the product or service. If you already have loyal customers from your crowdfunding campaign when you launch your product to the masses, you have people who not only value your product and services, but also identify with your company who can be proactive to help you succeed. You have a customer and a brand ambassador.
There are two trains of thought when it comes to pricing pre-sale items. First, you can offer your product at above-market value. This type of reward helps donors understand that they are also investing in you and your project, not just buying something of value. Second, you can offer your product at below-market value. This type of reward will attract donors who are interested in helping you, but are also motivated by the addition of receiving a bargain for their hard earned dollar.
2. Limited editions and one-of-a-kind reward items are always a hit with potential supporters. The sky is the limit on how you can incorporate these into your rewards structure. You can offer a unique or enhanced version of your product or invention that will never be available to the public, or other awesome collector items emblazoned with your logo. You can offer these goodies to the first ‘x’ number of supporters, or alternately, you can create a distinct, mid-range contribution level specifically for this type of reward.
3. Just like with Groupon, people will pay for a discount, a coupon or a price break in advance. A crowdfunding campaign allows you to give a clear message to your customers rather than just making you another name in their daily deal email. If your business has a 50% profit margin, consider selling a 25% off discount card for $100 that is good for a year. While it cuts your profits for that one person, you get money up front, more customers coming in with the donor later at full price, and the money you make through donors who do not remember to use the discount later.
4. Offer recognition or a “credit.” A common reward for many crowdfunding projects is to list sponsors on a website, thank them on your Facebook page, or give other recognition. While we won’t be cynical and say that acts of generosity are often self-serving, the reality is that many people love to be recognized for their actions. Charities publish long lists of donors to offer both thanks and recognition.
5. Offer a “naming” right. If you can name a product or service after a donor, you not only have a customer for life, but also a walking billboard for your business. If you own a restaurant and name a sandwich after someone, that customer is coming back time and again. It costs you nothing but that proud person will be a repeat customer, and give great word-of-mouth marketing that brings you other customers.
Coming soon: Part 2 of this series where we tell you about other cool things you can also offer like getting input from your supporters and offering thrilling one-of-a-kind experiences!