Unlocking Kickstarter Success: Why Rewards Are Priced Below Retail Value and How to Optimize Your Campaign

Successfully launching a project on Kickstarter often hinges on effective marketing and reward structuring. One common technique is pricing rewards below retail value. This approach serves multiple purposes, from incentivizing potential backers to providing early access and mitigating perceived risks. Let's delve deeper into why this strategy is so effective and how you can optimize your campaign to maximize your fundraising success.

Understanding the Psychology Behind Discounting

Discounting is one of the most effective marketing strategies, both for Kickstarter campaigns and general business ventures. Consumers have become accustomed to the idea that crowdfunding offers discounts. This expectation, coupled with the inherent risk of pre-ordering a product, makes offering rewards at a lower price an attractive proposition for potential backers.

Core Pricing Strategies for Kickstarter Campaigns

Discounting

Discounting helps create a sense of value and urgency. It's all about defining the motivation for people to back your project in one sentence: People looking to buy innovative products at a discount before anyone else. By offering limited-time discounts and restricted quantities, you can create a sense of urgency and encourage early backers to act quickly.

Price Anchoring

Price anchoring is a cognitive bias where initial information influences a subsequent decision. For example, a restaurant might list a signature dish at a high price, and everything else is relatively low. This helps to establish a benchmark, making other items seem more reasonable in comparison. Adapt this concept to your Kickstarter campaign by introducing heavily discounted initial rewards and gradually increasing prices.

Scarcity and Urgency

Creating a sense of scarcity and urgency can be powerful motivators. By limiting the quantity or the availability of rewards, you can trigger fear of missing out (FOMO) among potential backers. Additionally, setting a limited time for specific rewards emphasizes the need for speed, further driving conversions.

Value Stacking

Value stacking involves offering additional benefits as the reward tiers increase. As the price goes up, so does the perceived value. This strategy works particularly well when you offer multiple standalone products. For instance, rewarding backers with an additional product (like an extra blade) or a bundle of products (such as a stealth shovel and saw) for a higher price.

Three Reward Strategies for Maximum Impact

Strategy 1: Reward Stacking with a Single Product Focus

When launching a single product, it's effective to offer multiple reward tiers with varying prices and availability. This approach helps to engage different segments of your audience. For example, The Empire's Kickstarter campaign utilized a simple yet effective reward stacking strategy, starting with a heavily discounted "Launch Special" and gradually increasing the price as the campaign progressed.

Strategy 2: No Brainer Deal for Multiple Add-ons

If your product has multiple add-ons or optional features, the No Brainer Deal strategy can be highly effective. This strategy involves offering a basic version of the product at a lower price and a more comprehensive version at a slightly higher price but with additional benefits. For instance, in the case of BaKblade 2.0, offering a "Starter Pack" and a "Full Pack" allowed for increased sales of the higher-priced option.

Strategy 3: Value Stacking for Multi-Product Campaigns

For campaigns featuring multiple standalone products, value stacking can drive higher-value rewards. By offering bundles that include multiple products, you can increase the perceived value and encourage backers to choose higher-tier rewards. The Alpha Shovel campaign successfully employed this strategy, creating bundles that offered more comprehensive and valuable packages at higher prices.

Conclusion

Optimizing your Kickstarter rewards to be priced below retail value is a powerful marketing tactic. By understanding the psychology behind discounting and utilizing strategies such as reward stacking, price anchoring, scarcity, urgency, and value stacking, you can boost your campaign's success and increase your fundraising goals. Good luck with your campaign!