If you understand the three types of backers and the naturally occurring law of the 80/20 power curve, you will have stealth Superman powers that you can use for creating Magnetic Rewards no backer can resist.
This module includes: 1 Video Totaling 21:34 Minutes, Rewards Builder Template, Rewards Budget Worksheet
CRITICAL STEP: Download the Rewards Pricing Spreadsheet (Excel) and use the 8 color-coded steps in this spreadsheet along with the Rewards Builder (below) to dial in your optimal Rewards Pricing Curve and double-check your pricing and margins.
The Three Reasons a Person Will Back You…
- They feel obligated to back you
- They want to support you as an individual
- The product or project personally connects with them
People come to your campaign page with a price range in mind whether they know it or not. In most cases, they pledge based on their pre-determined monetary level of support, NOT based on the stuff they get in return, although “the stuff” plays a small role.
So your challenge is to make sure there is something available at every person’s pre-determined pledge amount and that the value warrants it’s price. Even though “value” isn’t the primary determining factor, it still needs to match up with that reward’s price level.
In other words, your rewards are NOT an online shopping experience like most campaign creators assume. Your rewards are the mechanism that gives backers a tangible and justifiable way to pledge their maximum amount. Up to 60% of Your Pledges May Be Given WITHOUT Selecting a Reward! This phenomenon should help you see that they’re not “shopping” and selecting a reward based on what they get in return. Instead, they’re hoping to find a reward that best matches up with their pre-determined amount.
The Rewards Builder, optimized to:
- To ensure a HIGH MARGIN so you have enough money to complete your project.
- SIMPLE REWARDS FULFILLMENT that won’t unexpectedly cost you time and/or money to deliver.
- A distribution of pricing points that takes advantage of the 80/20 POWER CURVE.
Lower Price Range
1) Recommended Price Range of $1-$10: Digital Download (DD) 3 song mixtape, acoustic or single song, or just a thank you.
2) Recommended Price Range of $10-$20: Digital Download or DD x 2
3) Recommended Price Range of $20-$40: Physical CD, Signed CD, CD x 2
Middle Price Range
4) Recommended Price Range of $30-$50: Video greeting, vinyl.
5) Recommended Price Range of $40-$100: You Pick Two (phone call, picks, lyrics, ringtone), vinyl, Listening Party, Personalized Video Message, T-shirt.
6) Recommended Price Range of $50-$200: Song of the Month, Video of Special Request Song Performance, Discography bundle, Album Credit, Tour Tickets, Video Documentary.
7) Recommended Price Range of $75-$350: Karma Contribution (no reward, just digital download), framed custom art, hand made gifts, home cooked dinner with the band.
High Price Range
8) Recommended Price Range of $150-$500: Album Credit, Custom (co)written song, Jam/Record With the Band, VIP Tickets, Concert/Tour Tickets, Dinner, Adventure, Date, Higher-End Original Art, Original Song Video, Day at The Studio, Handwritten Lyrics, *Skype Concert.
9) Recommended Price Range of $225-$750: Album Credit, Custom (co)written song, Jam/Record With the Band, VIP Tickets, Concert/Tour Tickets, Dinner, Adventure, Date, Higher-End Original Art, Original Song Video, Day at The Studio, Handwritten Lyrics, *Skype Concert
10) Recommended Price Range of $350-$1000: Acoustic House Concert
11) Recommended Price Range of $500-$1500: Full Band Concert
12) Recommended Price Range of $750-$2500: Rock Show with Full Production, Executive Producer
*I’ve seen the Skype Chat and Skype Concert rewards many, many times and they almost always fail to get pledges. Unless you have a special scenario, using this as a reward option is not recommended.
What is the 80/20 Rule?
80/20, also called The Pareto Principle, is an inviolable law of nature, which states that roughly 80% of the effects come from 20% of the causes. It’s also a common business rule of thumb: we know that 80% of sales come from 20% of the customers…and it holds true with crowdfunding.
Around 80% of Your Funding Will Come From About 20% of Your Backers.
What does this mean for you? It means that your mid and high priced rewards deserve most of your attention because those are where most of your funding will come from.
A correlation you must make is that those who you’re closest to will likely be the ones who fund 80% of your campaign. We’ve seen that the further out a person is from your Inner Circle, the less they pledge on average. It’s important to match your mid and high priced rewards with the people who are listed in your Inner Circle.