How I did Kickstarter: Deciding on the rewards


Each of these posts have made reference to how important any given aspect of the Kickstarter project is. The pitch text is the most important, but so is the video! And also the goal. And while all of that is true, none of it matters if you don’t have good rewards. The rewards are the things that will really define just how much money you get. Some people don’t care about rewards, and they will give you a certain amount of money whether they get something out of it or not, but many will define their contributions based on what they’re getting out of it. 

I couldn’t count on two hands the numbers of times I’ve considered backing a Kickstarter but never did so because I wasn’t interested in the rewards. Kickstarter may not be a store, but it is a marketplace. And everyone in that marketplace needs to have something worth selling at a price worth paying.

[Alec is doing a Kickstarter. You can (and should) back it here. Through the project’s duration, he will be writing a series of articles about the process. More about that here. Check out the other entries here.]

Photo by Claytes - Deviant art

Why a date costs $5,000

Most Kickstarters have a dozen reward tiers or less. Some have only a couple, very few have more than 15. A nice variety is useful, but too many options could backfire. Even so, we went with 24 different tiers. It’s certainly not the most I’ve seen (Veronica Mars had over 30), but it’s up there. Of those tiers, only 11 ever saw usage. But that doesn’t mean all of the other work was for naught. Because some of those rewards were written not really to pull in pledges to those tier but to give people a laugh. The $5,000 tier, for example, is a date with my co-director. This was one of the first rewards I came up with, and I still think it’s a great one. But did I ever really think someone would pay $5,000 for that? No. Of course not.

But it’s funny. (At least I think so.) And we are totally serious about it. If someone put down the money for that date, it would be on. But we put it there more to make people laugh than to actually entice them to giving us $5,000. (That sounds a little more calculated than it should.)

By the same token, it was important that we had some experiences in there. Being an extra on camera, the aforementioned date, or generally spending time on set aren’t necessary things that are so easy to slap a number onto, and we probably made them more expensive than was reasonable, but that’s a lesson learned. Either way, to have only offered physical rewards for what it is, in a sense, more of an experience (and film is an experience) didn’t feel right. When I can afford them, I’d always choose an experience over a thing. And the Kickstarter rewards are a reflection of that.

Why a download costs $15

Another reflection of personal preferences was the decision to put a download of the film up for $15. The majority of films I’ve looked at on Kickstarter put the full downloads up for between $15 and $25, and I’d say that the most common are $20 and $25. From a financial perspective, that latter one makes sense. Kickstarter itself heavily recommends having a good $25 tier, because it is statistically the most popular tier of all. By putting the film at $25, you’re basically guaranteeing that none of the earlier tiers are worth all much, so why would they do anything less?

Well, here’s a fun fact about me: I have never paid $25 for a film download and probably never will. And I wouldn’t ask potential backers who want to see Reel to spend $25 in order to do so. (The fact that it’s a short film makes that more true, but it would apply no matter what the length.) So we a digital download of the film is $15.

And it’s our most popular tier.

Kickstarter tier graph with one overlay

Though that wasn’t always the case. In fact, the $25 tier was the most successful until yesterday, and the $15 tier overtook it just a few hours ago. It’s very interesting to look at the distribution of rewards. As you probably noticed, there’s no legend for the X-axis, and that’s because it’s just the relevant tiers clumped next to each other. There are three tiers with no backers in between the $100 and $200 tiers, and neither of them are reflected on the graph. The rightmost tier is $200, and directly to the left is $100. So at a glance, you don’t really glean much other than very basic trends: almost everyone who backed it wanted a copy of the film, for example. But that’s kind of it. (If you’re curious, the left-most bar is for people who didn’t request a tier at all. They just gave us the money. I’ve told most of them that they should really get something out of it but to no avail.)

(Side note: Why the Y-axis, which refers to number of backers per category, goes by 5s and 2.5s rather than 4s and 2s or some other whole number variation is beyond me.)  

Why a mug costs $75 (Well, $35)

From a fulfillment perspective, digital rewards are definitely the best. They take time to prepare initially, but the actual monetary cpst is negligible. As long as we have the storage to accommodate the files and the bandwidth to accommodate the downloads, there are no other costs to worry about. So we made sure that what was all-but-guaranteed to be our most popular tier was digital-only, because that was easiest for us.

But what about actual physical products? Mugs, posters, DVDs? How much should we charge for those things cost? Figuring that out was extremely difficult, and I’m not sure if we did it right or not.

Let’s talk about the $75 tier. For $75, you get a mug, a physical thank you note, and all of the digital rewards we offer. The digital reward tier is $30, which doesn’t cost us much in terms but represents a lot of time and effort, given that it includes a digital poster, script PDF, download of the film, and a download of the soundtrack. The $40 tier includes a physical thank you note. It doesn’t cost a lot for us, but it does take extra time, and depending on what our actual budget ends up being versus how much we make (again, those numbers are very different), we’d like to get some decent cards to do that on. So the $75 mug really costs $35.

Kitty cat!

That’s a lot for a mug. Don’t think we don’t know that. But it’s the reality of what we’re trying to do, because the biggest problem with physical rewards is that they cost money. That’s what makes them worth more than digital counterparts, but it also makes them harder for us to deal with. We have to factor in both the fact that a blank mug costs something like $10 plus shipping. That’s easy for a product-focused Kickstarter. In fact, many Kickstarters offer cheaper-than-retail prices for their products as an incentive to back (and I’ve bought into a couple of those). But we’re not making products. We’re making a movie. And every physical item we have to fulfill is money that comes from our budget that could go towards making the movie better. More than one-third of that mug-specific $35 goes towards getting the mug and then shipping it out.

For something like a signed poster, there’s the added cost of double-shipping it. We first have to have the poster shipped to us and then we can sign it and then ship it out again. That adds to to our cost for us, and when choosing prices we had to be conscious of that. Backer rewards are great, but they’re also a drain on the budget. If we had put mugs at $50, we almost definitely would have gotten more people backing at that tier, but it’s also entirely possible that we could have lost money in the process. 

Our hope was to keep physical fulfillment at approximately 10% of our total, and though it looks like we’ll be going a little over, it won’t be by much. And that’s something I’m proud of. Much of setting up a Kickstarter campaign is being realistic about the cost of everything, your time commitment, and you general abilities. And nowhere is that more relevant than with your rewards. You need to choose things that are worth paying for that can be fulfilled without breaking the bank. 

Good luck.