Kickstarter Lesson #54: Reward Levels: The Premium Option

10 September 2013 | 31 Comments

I’ve talked about reward levels here before, but today I want to focus on a specific reward level that is a key element of most successful Kickstarter projects: The Premium Option.

This is very closely related to the concept of the anchor price that I described in the previous lesson about reward lessons. An anchor price establishes a base price for your product so your backers have something to compare the price of the other reward levels. It offers quantitative context, and it’s low enough that it gets people in the door.

The premium option is the opposite of the anchor price. It is a separate reward that is tantalizingly close to the anchor price, but SO much better. It should give people a truly compelling reason to upgrade, or simply an outlet to spend more on the project if they want to help you reach more stretch goals.

Here’s how I’ve used the premium option in my campaigns:

  • For Viticulture, the anchor price was $39 for a copy of the game (61 backers). The premium option was $49 for the game + the expansion (427 backers).
  • For Euphoria, the anchor price was $49 for the game (2,314 backers). The premium option was $59 for an extra set of 24 custom dice and an alternative-art deck of 44 recruit cards (1,794 backers).

However, there was a big difference between the two campaigns: I offered Viticulture’s premium option from day one, while Euphoria’s premium option was something I added about two weeks into the campaign after gathering backer feedback.

I discussed the idea of adding a premium option mid-campaign with Michael Iachini over on his retrospective on the Chaos & Alchemy campaign (a great read). Similar to Euphoria, Chaos & Alchemy originally had only a base price of $25 (301 backers), and midway through the campaign Game Salute added a $39 premium level (610 backers).

The fruit of the discussion is that even though adding a premium reward level during the campaign gives the project a nice boost, it’s best to have that level from day one. Although it was neither of our intentions to hide things from backers (both ideas came up during the campaign, not before), the more transparency and information up front, the better. Plus, plenty of people will go after the premium option from day one, so there’s no reason to make them wait.

However, there are two things you should do during the campaign:

  1. Once during the campaign, send a message to all backers of the anchor price with your best pitch on why they should upgrade to the premium option. Don’t be pushy. Just let them know the option is there, and tell them exactly how to change their pledge on Kickstarter. Do this exactly once, about 3 weeks into the campaign.
  2. Gather feedback during the campaign about what backers want, and if possible, turn that feedback into a backer-driven extra-premium option. This should happen organically, and thus it may not happen. But allow your project to be a living, breathing entity–if backers want an extra set of custom dice that serve absolutely no function in your game, give them what they want (providing it works for your manufacturer and budget).

How have you seen the premium option effectively used in other projects?

31 Comments on “Kickstarter Lesson #54: Reward Levels: The Premium Option

  1. Its clear for Viticulture you offered 2 things for premium game, and for Euphoria 1.2 things. That expansion really sounds good and me as backer like that so much more then when it says few more things even if that is 20 x A, 15 x B and 10 x C. Expansion is + 1 and sometimes that is more then + 59 parts. Agents rocked that part with their +4 expansions reward level. Also I think Myth did great job with their anchor premium level rewards where they sold like 1% of anchor and rest was premium because everyone upgraded to premium. Why? Not because they said it contains expansion but because they made it feel like it has 2 more expansion.

  2. Interesting article Jamey, but regarding your thoughts about giving the premium option at the beginning of a kickstarter project, but I am not sure you can apply these thoughts directly to your own Euphoria KS, because if I remember correctly (please correct me, if I am wrong), at least the alternate art deck was a backer driven initiative and even the extra dice was something that only matured during the project. I think this is a new form, a new type of offering a premium level product, as it doesn’t offer solely something pre-designed from the start, but is open for suggestions to backers. From my experience with KS, the experience I already got from backing several projects before and my observation of the Euphoria KS, my conclusion ist, that you had a highly flexible, courteous approach when handling backer suggestions which, for me, lead to a new expression of socialism I would call ‘social game design’ – and the highly sucess of Euphorias premium option with sketched cards and additional dice set serves just as an exemplary case for emphasizing the effectiveness of this new approach…

    1. Bernhard–Yes, that’s a really good point that I discussed in point #2:

      “Gather feedback during the campaign about what backers want, and if possible, turn that feedback into a backer-driven extra-premium option. This should happen organically, and thus it may not happen. But allow your project to be a living, breathing entity–if backers want an extra set of custom dice that serve absolutely no function in your game, give them what they want (providing it works for your manufacturer and budget).”

  3. Great straightforward, elegant, and essential lesson, Jamey. Thanks. Curious: are there any premium level packages that you thought of *after* the success of Euphoria that you think would be great for future promotions of your games? And since you’re now building a brand around your company, what do you think of premium rewards including other branded material beyond items tightly tied to gameplay – e.g. detailed miniatures like a stack of wine-barrels for Viticulture?

    As to your question in the post, while I think The Agents (KS: http://www.kickstarter.com/projects/673576049/the-agents-a-double-edged-cards-game Stonemaier’s own interview: https://stonemaiergames.com/the-agents-the-interrogation-begins/) did premium levels really well and to a great degree, Hex (KS: http://www.kickstarter.com/projects/cze/hex-mmo-trading-card-game) made. it. happen. ‘Cause 2.2 million. ‘Nuff said.

    Other than those two from the gaming world, I liked what Kreyos did on Indiegogo (IGG: http://www.indiegogo.com/projects/kreyos-the-only-smartwatch-with-voice-gesture-control) because of how they monetized colors, accessories, and give-a-gift-to-a-buddy options (e.g. multi-watch packs). Product design projects on KS use premium levels a ton, so I think it’s worth everyone’s time to review that category as much as the Tabletop games section for inspiration. Add-on options are also changing the game of crowdfunding, again largely led by product design projects. But we humble boardgamers are catching up!

    1. Adam–Thanks for your comment and for sharing those links. And that’s a great reminder to use product design projects to inspire us game project creators.

      Premium level packages I thought of after Euphoria…hm, good question. Everything about Euphoria is premium, so I honestly haven’t thought of anything to make it better after the campaign. The same with Viticulture–I see what you’re saying about wine barrels, but in terms of functionality and feel, the glass tokens are ideal for the game. I’m sure I’ll think of something in the future, and if that happens, I’ll make it available on a future Kickstarter campaign. I don’t want to constantly make my backers feel like there’s yet another thing they need to add to the game for it to be “complete.” I’d rather deliver the complete package the first time around.

      1. Thanks for your response – and for your thoughts about premium items in regards to Euphoria.

        Not sure what you think, but maybe a game’s type helps or alters the opportunity (and need) for premium level rewards on KS (?)

        For instance, games or products that inherently or, perhaps, inevitably have expansion content/accessories (see the Agents, Web Miniseries, or even smartwatches) have the highest likelihood to offer premium levels since these projects do not have a well-defined boundary in re: consumer narrative.

        Contrast that with, let’s say, “narrative complete” games like Caylus (and for others who say “wait they had a premium version!” – I’m talking about new content in particular, not new coins or pieces), Scrabble, and your own; where the game tells the story in one go and provides a complete experience – as you said – “the first time around” as opposed to in installments.

        1. Adam–That’s an interesting way to contrast games in regards to the premium level. I will say this about premium levels that add gameplay elements: They really complicate things down the road. I’m going to write about gameplay exclusives soon, but that’s a slightly different topic, but even a non-Kickstarter exclusive gameplay upgrade can make things difficult later. I would be very hesitant to do that.

  4. Hi Jamey,

    I would love to hear your feedback about the potential impact of Kickstarter premium/exclusive rewards on the manufacturing and fulfillment process.

    My first thought is that offering premium or exclusive rewards in contrast to a base level product would require packaging and fulfillment of at least two unique products with a varying component mix. This type of reward model is further complicated by a manufacturer minimum order quantity and an unpredictable number of backers for a given reward type once the campaign ends.

    In short, a project creator might conclude a campaign with only a limited number of backers for a given base/exclusive reward type; yet, would still be faced with satisfying the minimum order requirements and potentially excess product.

    It appears that the premium/exclusive reward model is necessary for proper funding, yet potentially problematic given the minimum quantity requirements.

    Your thoughts are appreciated…

    1. Hi Tom, thanks for your question. This is a great question to keep in mind as game creators consider premium levels. Most manufacturers are going to have certain minimums you have to meet to produce any component. So if you order 2,000 games and only 500 backers also ordered a unique component, you might get stuck making an additional 500 units of that component just to meet a minimum.

      However, the risk is mitigated if the premium component gives backers a great reward for the price. That greatly increases the chances of the premium level being the most popular reward level, thus also increasing your chances of meeting or exceeding the minimum quantity.

  5. Thanks Jamey, I will need to revisit this and request some clarification from PGM since the minimum component quantities in my quotation were much higher and difficult to find a balancing point.

    Another plate to spin…

  6. IMHO a premium option like you did is a good way, while there are other campaigns where I feel the “premium option” is the base game and the anchor prize is a cut version, forcing you agressively to go with the premium tier.

    1. I can definitely agree with this. A great example is the Smash Monster campaign (here: http://www.kickstarter.com/projects/5thstreetgames/smash-monster-rampage ). Though probably unintended when the game started, the creator’s addition of (effectively) 8 expansions at the $100 level makes it the only feasible option for most people that want the game.

      Though maybe that’s a bit too far from the “anchor price” of $35 for it to count, I think I’d still consider it the premium version. $35 for the “base” game, $60 for the game + one expansion, and $100 for the game + eight expansions is a no brainer.

      1. That’s an interesting example, but $100 was an early bird option.

        It’s $125 for the 8 expansions, though at the end of the campaign, the $105 tier was still available, interestingly. (and $88 for 2 expansions – that seems ridiculous! Maybe it’s meant as a psychological trick to guide people towards the higher tier?).

        402 of 566 backers were at the $100/$105 early bird 8 expansion tiers.

        490 of 566 backers did either one of those, or the 35 base game.

        I felt that $35 is the better deal and 88 other folk agree.

        8 spent 60 for 1 expansion
        2 spent 65 for 2 games
        0 spent 85 for 2 expansions (unsurprisingly)
        1 spent 93 for 3 games

        I wonder at the logic behind having the sub $100 tiers that attracted so few folk. They certainly raised a lot of money, but could they have done even better?

        All we can do is speculate and make intelligent guesses.

  7. This is such a great lesson, and one of my personal favorites from you Jamey! I think this idea can be incorporated with almost any product or service for that matter, and I think it all boils down to “value”. It’s not so much about the price (even though pricing can be strategic), but more about the value proposition.

    When I ran my campaign back in July, I used this model and it worked really well. My base game (anchor price) was set at $59, and my premium game was set at $79. I had 52 backers pledge for the $59 base game, and 190 backers pledge for the $79 premium version. I did this by adding a high amount of value to the premium version (an expansion, an extra miniature, and a set of exclusive dice).

    The important thing is, all of those extras did not cost me a fortune, and my profit margin was actually much higher for the premium game. Yet, the added value was also much higher for the backer. I think that is the key, creating a premium version of your product that is a win-win for both you and the customer in terms of value.

    1. Thanks for your thoughts, Mike! It’s pretty incredible what the premium option can do. I think backers are often quite excited to get the premium option, but having the baseline of the regular option helps to convey the value they’re getting.

  8. Hi Jamey,

    I have a question about different versions of the same game. With Nautilus Industries I decided to do a Kickstarter exclusive Deluxe version, as well as a regular version. It ended up with some surprising results and I was wondering what your thoughts were, since Scythe has several unique SKU’s.

    The way I planned out our Kickstarter was to make the deluxe version the one that benefited from the stretch goals, and the regular version is just a good solid base game. I thought that many people would back at the base level early on, at least until there were a couple of good stretch goals unlocked, but I was very wrong. During the whole campaign only 4 backers out of the 427 backed the base game total. I assume you know most of this already but I thought the results to be quite interesting.

    I made a deal with Panda to split my order between the deluxe and the regular so I don’t have a huge number of extras or the deluxe version, but I do have some. I’m working on our next campaign now and I really struggle with how to do the Kickstarter exclusive thing, or if I should do it at all.

    Do you find it over complicated or even redundant to have multiple versions? While I am proud of our regular version, the deluxe version is just so much more appealing that it makes me think twice about doing different versions in the future.

    As always sir, you are an inspiration and I look forward to playing my copy of Scythe when it comes!

    Thanks,

    Mike Friesen
    Lamp Light Games

  9. Mike: Thanks for your excellent question. I think this is a great example of why not to do Kickstarter exclusives. You now have an extra stock of games you can’t sell because of the “exclusive” label. I think you would have seen nearly the exact same results if you had simply had a base game and a deluxe level (removing the word “exclusive”).

    Separate from that is your question about complications. I definitely feel like the more SKUs you have to juggle, the more complicated your logistics will be. But that’s when you have 4+ versions of the game–having 2-3 versions isn’t difficult at all.

    As for the mass-market appeal of a normal versus a deluxe version, I’d keep these two things in mind: One, the retail MSRP makes a big difference. If you want to make the deluxe version and the standard version the same thing, but the cost is really high, you may really be limiting the long tail of your product. Two, perhaps this is more of a question of creating a base game that you’re just as proud of as the deluxe version. Like, with Scythe, the Premium version of the game has metal coins and $20 of promo cards, neither of which are in the retail version of the game. But the retail version is still a fully-formed, fully playable, elaborate, beautiful game. So if you keep the base and deluxe games as separate entities, make sure you feel good about selling the base game to anyone and everyone. If it’s missing someone that prevents you from feeling good about it, I think that’s a sign that you need to add that element to the base game.

  10. Hi Jamey,

    I’ve been thinking hard about how to use the strategy of the premium option. Thanks for writing about it here and in your book. I wanted to let you know that the link to KickTotal seems to be redirecting somewhere else. Perhaps it’s no longer available…?

    Cheers!
    Rocket

  11. So glad you wrote this post! We’ve been thinking about the possibility of a premium reward level and weren’t sure if would be a good idea or not, this lesson makes it clear. A couple questions:

    -Would you recommend having a premium option even for “humble” campaigns?

    -What are your thoughts on the premium option being the exact same game as the base level but with better components? We are working on a tile game, so our idea is to have the base reward use a square deck of cards as tiles, while the premium would use thick chipboard tiles and a larger box.

    As for examples I’ve encountered, the recent Lab Wars campaign had the option of adding an expansion to the base game for an extra 6 GBP. When I first got to the campaign page my instinct was to opt for the base level. Then I saw that the next level up, which included the expansion, had more than twice as many backers, and I decided to go with that. I guess seeing the number of backer made me feel like the expansion would be worth it.

    1. Maggie: Thanks for your questions. Yes, I think premium options are great for humble campaigns. Something can be humble and streamlined yet also give customers the option between the basic version and the premium version–if you maintain your focus on humble/streamlined. The one tricky thing is ensuring you can meet your minimum manufacturing quantities with both versions.

      I really like your idea for the premium version! The only cautionary note is future compatibility. If you make an expansion someday, you’ll need to support both versions of the game.

      Also, for a tile-laying game, people will probably expect even the basic version to have tiles. :)

      Your last paragraph touches upon the classic psychology of the premium reward–it’s just a few dollars more, everyone seems to want it, and it’s better than the basic version. It’s quite compelling.

      1. Thanks for the response! You make some good points. I’m a huge fan of your work and am trying to follow all of your advice. I’ve also been listening to your audiobook, which is a great way to review the most important lessons in your blog!

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