This is part 3 of a 4 part series on rewards for crowdfunding campaigns.
Pricing rewards is more art than science. There’s no one formula to determine the best pricing for your rewards, because there are just too many variables to consider; perceived value, market competition etc. But here are some key things you should not miss out:
Start By Totalling Up All Product Related Costs
Pricing rewards is best done only after you’ve factored in all relevant product related costs, so that you can effectively project revenue. Or else you run the risk of making a loss. These costs include manufacturing, marketing, design, shipping, labour, perks etc.
It’s Quite Normal For Shipping and Fulfilment Costs to Overrun
Manufacturing and shipping delays all cost extra money, so ensure that you price your product is priced sufficiently high enough as a buffer to cover those sudden increases.
Aim For Rewards That Don’t Cost You Anything, Yet Give Backers a Great Experience
For example, it doesn’t cost a single cent to offer your backers the chance to visit your office and have coffee with the founders. Furthermore, your backers experience a deeper connection to your business.
Also, Take Note that Backers Will Likely Spend Between €20-€50 on Average for Each Pledge
It is not the focus of this book to go in-depth into the psychology of reward pricing, But if you want to read more, check out this well written article by Jay Ehret on pricing stuff: Three Predictably Irrational Pricing Strategies That Get The Sale.