27 July 2014 | 51 Comments
The KS Experiment series is a new type of blog entry where we feature a different, new, or innovative method for Kickstarter projects to be more attractive to backers and creators. We’re not advocating these ideas–we’re just putting them out there to get feedback in the polls and comments.
The other day I was talking to local designer and publisher Aaron Belmer, and he brought up an idea that I had once considered and dismissed. But Aaron offered a new perspective that made me see the idea in a new light, so I wanted to share it with you to get your thoughts.
When a project reaches a certain overfunding level, instead of adding more stretch goals, start decreasing the price of the product for all backers based on economies of scale.
One of the tricky things about a Kickstarter campaign is how to plan for success. First you just hope to fund the project, and of course you plan for that. But how much money will you actually raise, and from how many backers? You have no idea.
This makes creating stretch goals pretty difficult. Many creators loosely structure stretch goals based on economies of scale–the more units of a product you make, the lower the manufacturing cost per unit, so you can enhance each product without much of an additional expense.
So let’s say you plan a series of stretch goals every $5-$10k. At a certain point, economies of scale has a diminishing impact on these additions, and you might simply run out of stuff to add. Or maybe you started out on day 1 with a really robust product (you didn’t withhold any cards or additions that aren’t costing you extra to make). What do you do?
The Full Concept
Imagine a stretch goal chart like this. The core product is priced at $45 at the beginning of the project.
- $25,000 – Funding Goal
- $30,000 – small stretch goal
- $35,000 – small stretch goal
- $40,000 – small stretch goal
- $45,000 – small stretch goal
- $50,000 – big stretch goal
- $75,000 – price for all backers decreases to $43
- $100,000 – price for all backers decreases to $41
- $150,000 – price for all backers decreases to $39
When that $75,000 goal is met, you would close the $45 reward level, open a new $43 reward level, and notify backers to reduce their pledge.
Important: If the project ends with a any backers who haven’t decreased their pledge, you can send them a mass payment via PayPal or a voucher (you can do this on ShopLocket) for a future purchase made through your website.
Update: After reviewing Kickstarter’s guidelines, offering a voucher or money back to backers is probably not allowed: “Offering a reward at a lower price than what it may cost post Kickstarter is fine, but a future discount or coupon as reward is prohibited. Additionally, vouchers in exchange for a particular item (a meal, a book, etc.) are fine, but monetary gift certificates are prohibited.”
The stretch goals could also be based on number of backers, but I think funding total might work better here.
Why It Might Work
Two of the major reasons why stretch goals work is that they compel backers to share the project with others and increase their own pledges, and they help to convince backers on the fence to join in the project. Ideally, this type of stretch goal would encourage people to pledge to the project early so they could cause the price to drop–they get to be a part of making the project better for everyone, including themselves.
In a way, it’s the opposite of an early bird reward, but everyone wins. Instead of rewarding those who snag the precious few early-bird levels and punishing those who find out about the project too late, this system would make everyone feel rewarded no matter when they discover the project.
Also, as a nice side effect, you get more backers to pay attention to the project as it progresses so they won’t miss the chance to decrease their pledge (but again, if they do forget to do so, you can easily refund them via PayPal or ShopLocket after the project).
While everyone likes to pay less for something, this is more than about saving a few dollars–this is about the swell of excitement when people come together to make something better. The power is in the hands of the crowd for this method.
Why It Might Not Work
One of my concerns is that it might have the opposite effect. The system might encourage backers to stay on the fence, waiting for others to trigger the price decrease. Perhaps they’ll feel like they’re “losing” if the price doesn’t go as low as it potentially could. One way to address this would be to include one price-drop stretch goal ($75,000 in this example), but not reveal others until you reach that goal.
My second concern is the overall perception of the project on the days that those price-drops trigger. If you have 1000 backers when you reach $75,000 and they all decrease their pledge by $2, the overall funding will drop to $73,000 (you’d have to lock in the stretch goal the first time you reach $75,000. Or base it on total backers, not total funding).
Another concern is that it will clutter the reward sidebar. The good thing is that lower-priced reward levels are listed on the top of the sidebar, not the bottom, so despite the clutter, backers would continue to see the core reward first.
My last concern (I’m sure others will arise in the comments) is that it actually makes the premium reward less appealing than more appealing because the core price would go down while the premium price stayed the same. You could have the premium price on a similar scale, but that would clutter the sidebar even more.
I’d love to hear what you think in the poll and the comments, especially if you don’t like it (as a backer). Thanks!