Kickstarter Lesson #177: The “Everything, Forever” Reward Level

29 February 2016 | 17 Comments

2016-02-29_1040A few days ago I got into a debate with some friends about a specific reward level.

The project in question was Too Many Bones, a nice-looking dice game on Kickstarter. The project features a $450 reward (limited to 10 backers) that gives backers a copy of Too Many Bones and every future game the company produces through Kickstarter. 

The debate was about whether or not this type of reward is good enough to recommend for consideration by other creators. Does it create a system where everyone wins, everyone loses, or a mix of the two? Is it worth the risk? Does it make uber-fans complacent for future projects? And if you decide to offer this type of reward, what’s the best way to structure it?

I don’t have the answers, but I know someone who has used this type of reward level multiple times: John Coveyou, president of Genius Games. Despite being busy preparing for his new Kickstarter project, John took the time to offer the following perspective. I’ll chime in at the end with some closing thoughts.

***

Thanks for the opportunity to share my experiences with this type of reward. I’ve used it four times with mixed results. Please keep in mind that these are for games that range from $14 to $20.

It started with my first project, Linkage ($12,055 raised from 616 backers). We called the pledge level “Forever a Genius,” and we priced it at $350. The idea was to offer backers the opportunity to take a big risk with me–neither they nor I knew for sure if we would ever produce another game.

We had no backers at that level.

However, I still liked the idea, so I tried it again for Peptide at $450. It included 2 copies of Linkage and 2 copies of Peptide, as well as every future game published by Genius Games. This time it attracted 6 backers!

We featured a similar reward level for Ion, this time at $499 (2 backers), and finally for my most recent project, Covalence, at $599 (0 backers).

The original thought process was this: We don’t have a lot of money now, and we need money to produce these games. So we wanted to have some pledge levels that gave us some additional cushion. But these needed to be really good pledge levels.

2016-02-29_1128Long term, this doesn’t make financial sense for Genius Games. We will be shipping these backers free games long after they have received games worth the value of their pledge…. That is, if we are a sustainable company for that long so it’s a risk for those backers for fork up such a large amount of money.

But it made financial sense to me, because we didn’t need the money in 3 years or 5 years, we needed it now. Getting that money now was worth the long-term loss.

For the Peptide campaign, the project would not have funded if it were not for these pledge levels. The campaign was on a path to failure and by the last few days of the campaign it was clear we not going to hit our goal. But on the last day, 5 people pledged at the $450 level, generating 30% of the total amount of the campaign with all the pledges combined.

I was blown away and even a bit confused why people would fork up so much money to a campaign that was so close to failing. A few months later, I learned the answer.

I was hosting a booth to show off some of my games at an entrepreneur networking event in St. Louis when I was approached by a man in a suit. He introduced himself and started telling me how excited he was about receiving Peptide. I asked if he was a backer and he said and was very enthusiastic to tell me that he had pledge $450 to become a “Forever a Genius”.

He said he didn’t really care about receiving all the games forever, though that was a cool perk. He was a lawyer, made a lot of money and loved what I was doing. He gave that much money because he wanted to let me know that I had huge supporters and that I should keep making science themed games. So that made me start to think about this reward level in a whole new way.

The people at those larger reward levels are people who really want to be a part of that community. They want to know that they made a big impact on the project and the company. At those reward levels, I don’t think it’s about the product anymore. It’s about people who support the mission of your company.

So if I feature a reward like this in the future, I may want to make that higher reward level even more personal. For example, the Kickstarter for Epic Card Game had two $5,000 tiers that allowed those backer to spend a week in their office and just design games with them. That’s amazing. What a GREAT idea!

***

Thanks John! That is very helpful. Here are my final thoughts:

  • Target Audience and Price: Make sure you know who your target audience is for your specific project. Are they mission-driven or deal-driven? That answer may influence how you price the reward. Otherwise, I don’t think there’s a set formula for how much this reward should cost. John essentially puts a 10x multiplier on his (compared to the ~$20 price of his games, two of which are included in the reward), while Too Many Bones has about a 5x multiplier on their core product ($98) when you add in the shipping fees.
  • Past and/or Future: I like that John offers all previous products AND all future products as part of his reward levels. That’s a nice touch. Though I also see the appeal of the Too Many Bones method of only offering future products, as there’s urgency to it (you can’t just wait for the next project and still get everything).
  • Shipping: I prefer John’s method of offering free shipping. It creates a one-and-done value proposition, no extra calculation required for the backer.
  • Kickstarter Only?: I MUCH prefer John’s method of including all games published by Genius Games instead of the Too Many Bones method of “every future game Chip Theory Games produces through Kickstarter”. Perhaps Chip Theory Games plans to always use Kickstarter, but things change over time. It just doesn’t seem in the spirit of the reward to not include products released via other channels than Kickstarter.
  • Premium Rewards: If you offer premium or special-edition versions of your products on Kickstarter, make sure to specify in the reward level if it’s those versions that are included. I think that should be the default for this reward level, considering the expense.
  • Limit: Just to maintain control over the scale of this type of reward, I would suggest limiting it to 10 or so backers. (Thanks for Charles for mentioning this in the comments.)

Overall, do I think this type of reward level is worth the risk to a project creator? John says it well: Sometimes, a short-term gain is much more valuable than a long-term loss. I think it’s worth trying this type of level for your second project. I think there’s just too much risk for everyone on the first project–I wouldn’t want to pass on that kind of risk to a backer. But for a second project, it could make a big difference for the project and for your company.

What do you think, either as a creator or a backer?

Thanks to these and all other creators who inspire me every day. #CreatorAppreciationDay

17 Comments on “Kickstarter Lesson #177: The “Everything, Forever” Reward Level

  1. As a backer, I love the idea of a “lifetime subscription”! There are a few companies – well, people, really – who I will support for as long as they’re around. Not sure what I’d be willing to pay, but make me an offer =)

    As a creator, the costs are mostly obvious ($). I’d be concerned about someone forgetting them subscription list during fulfillment (and how to add virtual orders without being subject to KS fees, etc). For those reasons, I’d limit signup to maybe ten people per project. After five projects you’ll have a good idea of how well it works, and can lock it down or increase the limit accordingly.

  2. Another factor to consider – these subscriptions are going to come almost exclusively from your alpha backers. They will probably not be backing futute projects for more than $1.

    The impact of this on your day 1 momentum and overall funding level might be significant if left unlimited.

  3. I would hesitate to offer this as a project creator. I think it could potentially be awesome for a few backers, but I think there are some key potential negative outcomes.

    1) Turn super-backers into super-early birders. I know you don’t like early birds, Jamey, and this seems on the surface like an elaborate early-bird process. Maybe a few backers got the deal of the lifetime and you turn into the next CMON, pumping out projects, or maybe you really benefited as the creator if you only launch one or two semi-successful projects down the road. Either way, you’re turning a small group of people (say up to 10 per project) into VIP members and giving them access no one else has.

    2) The potential for negative backlash. Things don’t always go as planned. Maybe your next few games aren’t as warmly received. Maybe you get bought out by a bigger company and your reward tier no longer applies. Call me pessimistic, but I think the internet being what it is, people are more likely to take up pitchforks than congratulate you for being bought up by another company. Your mileage may vary, but I think there are better ways to build community (arguably the goal of this kind of forever reward level) that don’t have the potential to leave a bitter taste in backers mouths and a hole in your own wallet.

    3) Cost to creator. I think this was touched on it the article and the comments already a bit, but what happens if you go on to create 4 or 5 games in the future, each with different tiers (collectors editions, etc) and they surpass the value of the initial pledge? I agree that you’re trying to make people a part of a community, and I think it’s a much better financial decision to do something like let people design games with you for two weeks than it is to just give them free swag and at some point.

  4. Charles: I agree with that assessment of alpha backers. Though you’re right–there’s probably a good chance they’d still back future projects for $1 and participate in the community.

    Kyle: That’s a great point about the comparison to early birds. I think it’s a little different, though, as it doesn’t really exclude anyone. I think negative backlash has the potential to be a concern. The people who are likely to back at this level are also likely to be the most passionate, so if things go wrong, that passion might turn into anger. Though surely they would know that they’re incurring some of the risk by backing at such a level?

    As for your last point, absolutely, it’s almost definitely a losing proposition for the creator in the long term. That’s why it’s a question of the value of money now versus later.

  5. Personally, I would never buy this reward level on any Kickstarter and think it’s a terrible idea to post on your project page. However, I’m not entirely surprised that there are people who do that. Some people are “supporters of the arts” and are willing to give money to creators purely for the sake of furthering their long-term careers, but that’s not something I’m willing to do for someone I only know through the Internet.

    The problem is, if I saw a creator trying to get me to pay up-front for future products that they haven’t even thought of yet and ultimately have no obligation to deliver on, I would immediately think this person is 1) a scammer and is not to be trusted with my money or 2) completely unaware of how money works and is not to be trusted with my money. Either way, at that point I’m not going to back their project at any reward level.

  6. Jeff: That’s an interesting perspective. In your opinion, the mere presence of that type of reward level decreases your trust in the creator so much that you wouldn’t back their project at all? I agree that Kickstarter is all about trust, but that seems a bit harsh to pass judgment on a creator simply because they offered something that has been shown to be something that some people want. There’s risk involved, of course, but is it really be an indictment on the creator’s character?

  7. This is a tough one for me as both a backer and a soon-to-be project creator. The business-owner in me has a red flag go up. I’ve been burned so…many…times…by well-meaning people who run out of resources or motivation that I look for indicators like this to know what to avoid. It doesn’t mean I wouldn’t back the project…just not at that level.

    A lifetime offer from a time-tested, financially secure brand would be enough to entice many potential backers to jump in. Including me. Were it Coca-Cola, or Nike, or even Tom’s Shoes, I’d argue that there’s trust that has already been established.

    For a relatively new brand, I’d be hesitant to back a project at that level due to the risks. There are so many unknowns, many of which are not even on the table, like how much it will cost to produce and ship products *that haven’t even been dreamed up yet.* “We need the money now” is a terrifying statement.

    It’s good to keep in mind that that there are always “angel” backers can afford to (and want to) go the extra mile to support the project with little regard for the return. Like the attorney in John’s example. However, I’d argue that most backers are looking for tangible value and are likely to bank on the products that will arrive *someday*.

    With Kickstarter, you’re already gambling that your hard-earned dollars are going to yield something worthwhile in the unknown future. For games that range in the $20 range, I’d have to get 25 games for free just to break even at the $599 level.

    Backers are human beings, not investors. “Everything, forever” is one of those things that just sounds too good to be true. And as history has taught us time and again, they usually are.

    Conversely, I think it’s possible (and I’m doing this myself) to build the project value carefully, thoughtfully over time, brick-by-brick, in a way that that invites people into the story with a sense of wonder instead of urgency.

  8. This is a great comment! It sounds like you’re looking at it from the angle of someone who wants to get a good value from your pledge/investment. I think most people are like you. Though I thought John’s story was compelling–there are some backers who truly are moved by the mission, so it’s not a value proposition for them.

  9. Agreed. I think it’s also fair to say that someone could prove this approach with the details being in the execution. I’m merely stating the obvious barrier to entry, which doesn’t exist for everyone. I applaud John and others for going for it regardless of the fear of failure.

  10. I’m a backer at one of these “lifetime” levels, for Fat Dragon Games (https://www.kickstarter.com/profile/1679800548/created). This is a circumstance where it seems to work well — FDG has essentially no marginal cost for the product (electronic files, but perhaps a distribution fee from RPGNow (or DriveThruRPG?)). So the key question is to make the lifetime price high enough to compensate for effectively losing a customer (no future cash flow).

    To date, I’ve received products worth about half of my lifetime pledge (per subsequent Kickstarter levels), which looks like a good enough deal for both FDG and for me. In nominal terms, I’ll break even in 2018 or 2019 at the present pace.

  11. Kevin: I’m glad to hear you’ve had a good experience with this type of reward from FDG. It certainly is handy when working with a digital product instead of one you have to ship. :)

  12. John’s story is where I see the value. So many times, fans of the person want to see them succeed. In this case, a person John did not even know, and who wasn’t concerned about receiving the games in the future, was thrilled to be able to offer support in a way that made a difference.

    Fans want to help. This gives them a chance to do so. An established company with large cash flow and a strong brand doesn’t need to do this. But a small company just starting out needs all the help it can get. An opportunity to allow fans to help is critical.

    There is another point here that may be missed. The cost of providing a copy of each game into the future is extremely minimal. John and Jamey, you can both answer the question about how many copies of your game are sitting in inventory. Not every game is a best seller and sells out. You almost always have spare copies. The downside for a publisher is small with limited quantities and the upside, as John clearly pointed out, is huge in the beginning.

  13. Richard: Thanks so much for sharing your thoughts! You make an interesting point about inventory. That’s one way to look at it. Though the other way is if you have a customer who is so passionate about your mission that they’re likely to already support everything you produce, the formula changes quite a bit.

  14. Interesting. I commented on the Epic Rewards blog post about what we called ‘line for life’ rewards, and you’ve already covered it here! I’m still catching up on the backblog of reading I need to do here ;).

    I’ve used these rewards on 2 campaigns with good success and the ‘angel backers’ who funded these limited levels were generally people who just really wanted to help as much as they could.

    Some of you honed in on very important points here.

    1) Risk to the backer. There’s risk in every reward level of every project you may or may not support. The amount of it varies greatly. For some who support these types of rewards, they’re generally not backing your project for THEM- they’re backing to see YOU succeed. They’re not after the immediate value- or- that value is not in tangible form- the value is in giving. They’re generally (in my experience) in possession of a bit more disposable income- perhaps a good job supports their hobby (someone mentioned a lawyer)- maybe they don’t have kids- maybe they’re just very giving- whatever… but I guarantee they’re not looking at this support level with the worry about not receiving anything in the future- they’ve already accepted that risk that it may happen- as has every backer at every reward level in every project (whether they realize it or not). I hope that makes sense.

    2) Long-term loss to the creator. I really haven’t experienced this. For one, I’m HAPPY to ship to these alpha-customers. They helped me a while back to make something happen- it’s great to surprise them with a new game and continued success in the series. My cost is the manufacturing cost of the game, not the MSRP I set + the shipping cost (which is generally more expensive). Yes, there may be a break-even point where the original pledge is less than what you’re on the hook to send them, but, remember, they helped you at a time you needed the funding more than if you fast forward into the future as a company (hopefully). Still, as mentioned, I’m more than pleased to continue to reward these customers who were very generous and showed they wanted to see me succeed early on.

    3) Don’t do this on your first project. Here, I totally agree. I used this method on my first kickstarter, but, that was my 3rd game (first two were published pre-KS)… You need to build your brand a bit first before you ask people to subscribe to it for life. Make sure with games 1 and 2 that you can produce and deliver what you promise- without promising something in campaign 1 “for life”. In other words, if that first game is a flop, I guarantee you’re not going to make a 2nd edition or expansion or series… and so… anyone who did support you at that ‘lifetime sub’ level just got financially screwed. Again, they may not care as much as someone at a $30 level pledging just to get value for themselves… Still, I do not think it’s appropriate for game 1. Get established first. Build momentum. Then go all-in.

    v/r,
    Byron
    Collins Epic Wargames

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