Reward Tips
Discover cost-effective ways to provide valuable rewards to your supporters.
Hey Steemians,
We're going to be starting a segment about how to make crowdfunding a super easy breezy way to raise capital for your passion project. Every Thursday will be dedicated to funding or crowdfunding tips and tricks!
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As you all know, HyperFundIt helps facilitate funds for some awesome Steem projects. We do this by crowdfunding these projects on our platform with the support of the amazing Steemit community. But we also believe that these supporters deserve something awesome in return for their dedication.
This is why projects on our platform provide rewards at different donation levels. So if you're starting a project and you can't think of anything to give away here are some suggestions to start with.
1. Know your audience
Knowing your audience is key in everything that you do. If you ever feel lost about how to approach something always try starting here.
For each donation level, imagine who would be donating this amount and why. Then adjust your reward for that level to your imaginary audience.
For example: If your project is a software, it's very likely that the people who donate high amounts are truly invested in your software and intend to find use in it. If that is the case, you should offer rewards that are beneficial to the software user. These are usually something along the lines of a reduction in fees or an invitation to a special membership.
2. The Sweet Spot
The thing about crowdfunding is that majority of your donors will donate around the $20-$25 mark. That is the convenient amount that most people are willing to risk giving away to a new project that they believe in.
Since this is the case, the reward you choose for this amount is crucial to how well your campaign may do. This reward should be something that is easy for you to give away, cost-effective yet VERY valuable to a donor.
Let's go back to that software example:
A great reward for this sweet spot would be access to your Software's Closed Beta. This mutually benefits both you and your donor. You can finally have a group of people playing with your software so you can fix up all those bugs and get it ready for the official launch, and your donors get to be the FIRST to access your service. That exclusivity is extremely enticing. Imagine having been one of the first one hundred users on Steemit.
3. Don't Blow Your Budget
Budgeting for your rewards is incredibly important when crowdfunding. Usually, a majority of the budget goes to making and fulfilling the rewards for donors. But you can cut this budget down simply by offering rewards that are cost effective.
I know it's not as easy as it sounds right? But it is! To start, think of things that your project already provides that has value. Then consider how you can give these things to your donors for a discounted price or for free in exchange for their donation.
Again back to that software example:
Your software doesn't cost very much for someone to use. So why not give a short-term discount to someone who's donating to make your software's long-term existence? Service fee discounts, premium membership discounts, free online classes, free currency rewards etc., are all cost-efficient ways to provide high value to your donors. And because these rewards are still high value you can exchange them for higher level donations.
A key point to take away here is that to cut costs you want to provide as little tangible rewards as possible. By providing intangible rewards you're saving your team hundreds of dollars and hours of collecting addresses, boxing up rewards and shipping them out.
4. Setting a Limit
IF you're dead set on giving away tangible merchandise or if your product is a tangible product, SET A LIMIT. This is a huge mistake that many project hosts make. By not setting a limit you're risking the chance that your project goes viral (which is a positive thing and very possible when working with influencers) and you have to ship thousands of tangible rewards all across the world (turned into a terrible thing).
Consider the production costs and the time it takes to box, label and ship these products and how much manpower you really have. These things will help you decide what is a manageable amount to give away for each reward. Yes, you can always hire a fulfillment firm, but that's adding to your costs!
Will this deter you from receiving more donations? No. Not if your $20 donation level is something that's intangible yet valuable! (Think coupons or being added to a presale list.)
5. The 30% Rule
Ahh, the last and most important tidbit I have to share with you today. Robert calls it the 30% Rule. It's simple and goes like this:
"Aim to have approximately 30% profit for every reward."
Ok, last example I promise:
Let's say your project has a reward that costs you $100 to give away, this should then be assigned to a donation level around $130.
Why should we follow this rule? (Besides rewards that are high in value yet cost nothing to give away as mentioned before.) This is because no one would like to donate $200 and receive merchandise that costs $5 to make and ship.
To make sure your campaign is fair and provides value to its donors this rule should be treated like a golden rule of crowdfunding!
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Now that you have all this information jammed in your head I hope you've got a few new awesome reward ideas to give away to your amazing supporters!
If you're thinking about starting a project or are ever in a funding hiccup, hit us up in our discord channel!
That's all folks!
Iris Lee, President
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