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Crowdfunding Perks and Rewards
How to Pick/Price the Best Perks/Rewards
When it comes down to asking your friends, family members and business associates to open their wallets and donate their hard-earned dollars to finance your campaign, the most important question to ask is what do my customers really want? What does your campaign have to offer that donors/investors might be willing to trade, barter or invest to get the special gadget, gizmo, app or special service that your business plans to offer?
As we have said many times now, shopping the competition on a wide variety of crowdfunding platforms to see what the competition is doing is the best way to see what is working for other campaigns and what is not. What are the most successful campaigns actually pre-selling or giving away to raise their money?
Many people offer shout outs, thank you cards, credits in a movie, wrist bands, t-shirts, baseball caps and other related goodies that you can pick up at any industry trade show. Think of a carnival. What prizes do they offer to entice you to play a game you know you might not win?
Hopefully you are planning to use your crowdfunding proceeds to launch a real, long-term business. Instead offering goodies that really have nothing to do with your business, focus on offering the actual products and services that your business plans to deliver. In fact, offering a wide variety of products and services that you might offer is an excellent way to use the crowdfunding campaign as a product testing focus group to test marketplace demand.
Offering the same product at low, medium and high price points also will show you quickly where the sweet spot is. Many test this concept with Early, Early Bird; Early Bird, Regular and Here is All We Have Left pricing scenarios. Whatever products and pricing moves the fastest at the beginning of the campaign will be a clear sign of what people really want.
In many cases, the same core products are bundled with a wide variety of special offers and ancillary product add-ons that once the offer hits a certain point, customers just can’t say no. Just as in regular marketing, the key to success is learning exactly what your customers want. Crowdfunding is a great way to test various product bundles. If one of your perks has zero takers, drop it and put together another offer that is more appealing.
One cool way to think about perks or rewards is how well they might do if placed in a SkyMall Magazine that are popular on airplanes. Try to imagine how well your offers might do with customers flipping through a book chock full of other cool stuff they might want. How well do you think a regular baseball cap would do against a set of chrome plated billiard balls, a game controller with zero lag time, a wireless app that could diagnose any problems your car might be having via a spiffy wireless app running on a smartphone or a gift certificate to a day spa where you were massaged and pampered all day long? Try your best to offer cool stuff that people really want.
Other types of perks can be used to pit competing groups against each other. If you are developing a smartcar app, why not pit drivers of American made cars against imports? Or Android users against iPhone users? Your high school versus a competing high school. One NFL team against another. Loyalty to brand names, teams or products made in the USA versus imports is very strong. Leverage team spirit and social media networks whenever possible.
Especially in local markets when raising money from local donors and investors, offering VIP perks can be an extremely good way to reward your first wave of donors/investors for support your bar, restaurant or retail outlet. Promise early supporters lifetime VIP treatment or discounts for helping you get your business started. No waiting in lines, upgraded rights to share the same amenities reserved for high rollers or opportunities to rub elbows or take advantage of photo opportunities with celebrities or elected officials will give your campaign access to star power.
An important factor to keep in mind is keeping the promises you’ve made to your donors/investors. One of the most challenging tasks is fulfillment. Pebblewatch ended up pre-selling more than $10 million worth of smart wrist watches. Suddenly their team had to deal with manufacturing capacity, shipping of the actual watches to customers and many other factors that might have been pretty easy to do in a garage when selling several hundred watches. One thing to be cautious of is overwhelming success.
International Shipping Costs
One thing that novice campaign managers forget about is the fact that crowdfunding platforms reach a global audience. Shipping via Fedex or UPS in the United States is expensive. Shipping heavy products to China, Russia or South America can significantly increase the costs of fulfillment and if not careful, might possibly break the bank.
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Mr. Hoskins is a serial entrepreneur and has been helping entrepreneurs, startups, small businesses and Fortune 500 corporations launch successful marketing communications campaigns for 25-years. He is positive that Crowdfunding will empower all Americans to rediscover the possibility of living the American dream with a little hard work, a great business idea and dedication to planning a well-thought-out crowdfunding campaign.