When it comes to launching your crowdfunding campaign on Kickstarter, it’s important to beware of crowdfunding rewards and perk mistakes that can end up costing you money and time.
Creating compelling Kickstarter or Indiegogo rewards is essential to getting funding. However, if you go about it in the wrong way, you can run into a sticky situation.
In this post, I’m going to outline some of the major mistakes that you should avoid going into with your next crowdfunding campaign.
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Let’s get started talking about some of the big mistakes to avoid when handling rewards and perks on Kickstarter.
Calculating Costs
There are several things you need to take into account when calculating the total cost of your reward, including:
- cost of reward (manufacturing)
- shipping costs (duties, taxes, pick & pack fees)
- marketing
- stretch goals
- add-ons
- other tools your using (like BackerKit)
After taking all these costs into account, you want to price the reward so that there is a little bit of a profit margin in case something goes wrong.
If everything goes smoothly, then you’re left with a little bit of profit from your Kickstarter campaign. And who wouldn’t want a little extra cash for reinvestment?
You’ll also want to project different scenarios.
What if you end up raising 2X, or 4X, or 10x your Kickstarter goal and have to fulfill a ton of rewards? This is going to increase some of your flexible (sliding) costs, and you’ll want to make sure you’re prepared.
You can build out different models using Excel or Kickstarter’s Project Budget Tool to get a sense of how costs will change based on different campaign outcomes.
Overcomplicating Rewards
This common mistake is one that I see all the time on campaigns and with students that use my free crowdfunding course.
Many entrepreneurs try to take on too much with their campaign. Offering tons of variation, functionality, design, and color options can really complicate things.
It’s better to simplify and streamline your rewards as much as possible.
Of course, you want to offer a ton of value with your rewards—this is a hallmark of any successful campaign.
But at the same time, you don’t want to complicate things too much on the back end. If there are too many different SKUs with your product, it’s going to make fulfillment a nightmare.
If you run a successful campaign, you can always go back and offer more unique rewards through a second campaign or a pre-order store.
Survey Process
To collect backer information to send out rewards, you have to send out a survey.
You have to consider some things when building your survey, such as:
- failed credit cards
- incomplete surveys
- lack of up-sells and add-ons
A great way to deal with these issues is to hire a third-party like BackerKit. I’ve worked with them for years, and I can vouch that they have all things fulfillment completely handled.
Especially if you get into the 200-300 backer range, it’s going to be tough to deal with this all on your own. Using a trusted name that has been in the industry a long time can really help to make your survey process run as smoothly as possible.
Offer/Presentation
You want to sell your product with a mindset that I like to call a group of value.
When putting together your different reward tiers, you want to consider how you can list benefits and name the tier to engage your backers.
Visually appealing strategies like images can also help to increase the value of your presentation.
Overall, you want to be outlining and demonstrating the value of your rewards through a killer campaign page.
Backers should have a clear understanding of the value they are receiving at each tiered reward level.
Create a sense of urgency—don’t just list your rewards. Sell your rewards.
Conclusion
There are a lot of great places to get started when putting together your campaign.
My Youtube Channel is an awesome resource, as well as my free crowdfunding course that will take you through many of the basics that will be needed to run a successful Kickstarter launch.
I also have a tips guide for launching a successful Kickstarter campaign that reveals some of the best practices from the top minds in the industry.
I hope you enjoyed this post—if you have any questions or comments, feel free to leave them down below! I’d love to hear from you.
