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Lesson Info

Build - Reward Levels

How should I price my reward levels? This is one after the video, one of the most important things, Um, especially for photography and videography products, video projects. Um, it's a matter of price versus what you're actually delivering. So the simplest way to think about this is you should price your reward levels below msrp e. That's like the key terms remember is below msrp E. And the reason is to compensate for fulfillment risk. What that means is, if you go to the chipotle across the street, there's very little fulfillment risk that you're not gonna get your burrito bowl when you by the time you get to the end of the line, right? Or if you order something on Amazon, it's at your house in two days. Amazon prime, right? If you order shoes from Zappos, there's almost zero fulfillment risk, with most transactions that any of us do all day, every day. That is not true on Kickstarter on Kickstarter, there's all sorts of fulfillment risk. There's fulfillment that it might never happen.

There's fulfillment that there's a tiny, tiny risk that the person is a shyster and just wants to take your money right now. Kickstarter so far doesn't have much of that problem. There's not a lot of bad actors. There's people that want to do it. But there are a lot of people who want to create awesome things and just don't have the chops or they don't know about production or they don't know how to finish the film. And so there's a lot of, um, creation risk, right? So the pebble watch, for instance, it shipped like a year late in some cases a year and 1/2 late. And so now it was really, really cool two years ago. But now you'll see postings. People like anybody want my pebble watch. It finally arrived right a few months ago, and so there's a risk that it might get created. But it might take a lot longer than they thought toe actually create it and ship it. The's backers are early members of your tribe. These people are pulling other wallets and saying, I want this thing, but I want you to succeed in this thing by the definition of Kickstarter, either doesn't exist or it's not fully complete, and so your goal needs to be to delight them. You need to figure out How can these become your raving fans? Because if he's become part of the 1000 you get to 1000 and they are thrilled in doing backflips and be like, Wow, I got 500 high rez, amazing pictures for $15 they're thrilled and told a bunch of friends about it. They're gonna buy everything else you put out, all right? Think of the think of the people that you guys are in their 1000 true fans. Right? Maybe it's author. Maybe it's a particular filmmaker. You know how many true friends this Quentin Tarantino half right? That no matter what movie he makes, you could make a movie about him eating cereal, and people are gonna come wash it right? Certain people, Those are the diehards. Um, simple thing. Forget about the $10 and $5 digital high fives. Has anyone here ever woken up and said what I need today is a digital high five from somebody I've never met. Alright, right or a thank you. Thank you so much for giving me $10. I'm gonna put your name on my crappy website that nobody goes to Nobody wants that Nobody wants that, so just delete it. Totally flip this around like if you look almost every Kickstarter project has this. It's usually five or seven or 10. It's like digital five. Put your name on a website and spray paint on the bottom of my semi like nobody cares, right? How much value can you provide for $1? How can you make the $1 level super interesting and super valuable? And this is specific two photographers and filmmakers, because the end product is usually digital. So what piece of the digital and product can you give them for $1? And the reason that's one. You're not gonna break the bank with us. You're not gonna make. The whole idea is this is where you get your 1000 people for maybe your next project or your next tribe. And once they're in for one that well, first of all, the email address. Build your tribe right? We had a lot of questions about how do I build my tribe? I don't go in. My tribe will kick start itself is a great way to build your shop. It's a little meta. It's a little before and after a chicken or the egg. But, um, some of the smartest people that have done successful Kickstarter projects before now the light bulb was going on there like, Oh, I have a lot of emails now. And I should do a project really over delivering value just to collect emails, right? Think about Kickstarter as your lawn truck. All right. If you could give so much value for a dollar, they're paying you a dollar to give you their email address, right? Versus please blogged about me. Facebook ads, Google ads. How do I build my tribe? Um, they're paying you. Here's my dollar. And here is my email address. Right. And all you're doing is giving them something digital that you already created in the past. Right there. That's what That's a great deal. Especially if then what you give them is so valuable that now their party were 1000 true fans. Does that make sense? Cool. So if it's digital your cost of fulfillment zero, you can send them a Dropbox link or on Amazon Web services. Like so, the power, especially for filmmakers and photographers, is the product is digital and you can fulfill it for zero so they're thought moves from Will I back this project? Too little of my back. This project at their already have their wallet out in their mind is made up. That definitely back on that one. Let's see what else they got. And that is the thought process. And when you flip that versus think about the $10 digital, thank you. They just push their wallet down and they're like, I'm not giving 10 for a digital high five. What else you got now? They're like, Well, I'm in for one, right? So it changes their mind set. Or like, a J. You can bypass the $1 level completely and make the lowest level even more valuable. Right? So look at all the stuff A J included here. This was the book that he he'd get away for for in this part way through his campaign, Full, digital packed. This is the lowest level. $13. So he didn't want to just collect your your email for $1. He wanted to give you a ton of value, so I'm gonna read this. It says full digital pack with the audiobook. So the pdf, the audiobook, the e pub in the Mobi. So do a quick mental thing. If you were to buy the stuff on Amazon pdf pub, Mobile, maybe even group all those together in 1999. The audio books a little bit more extra, um, extra essays and, you know, high quality recording offer $13 right? It's way below MSRP E. And in a Jay's case, the book is the marketing, the writing and the audiobook. Everything else is so great that he knows it's gonna spread. So he made it. Really, really, you know, Reasonable. Yeah. Oh, I'm sorry. I should have covered that before. I m S r P is manufacturer's suggested retail price. So think of it is like full price when you go buy something or, you know, certain industries have changed. What I'm SRP is m s r p for a Kindle e book. Amazon has trained us that that's 9 99 If you're cheaper than 99 your maybe your self published, maybe it's just cheaper. If you're a Malcolm Gladwell, maybe you're 12 99 because you're Malcolm Gladwell, right? So it's like full sticker price wherever you shop. And because of the fulfillment risk you want to come in below that? So we're gonna look at this is a friend of mine, Matt Katniss. He did a trip saver app and he raised 346% funded. He raised almost $28,000 with a $1 app. And the reason is because it was blowing SRP that the app itself is gonna be $2. But then he got them hooked with that, and he offered some other really, really interesting levels below that. So he's a travel blogger e book. How to build a travel block, All the stuff that he had sold in the past for 10 2030 $50 and offered it much cheaper than that's why he got he got so many backers and did so well cause it's really hard to a naps on Kickstarter, because if the app is the thing you know, anyone who contributed at that $1 level got the actual thing. That's cool. Like when the now, like I need that travel out because I know that in Thailand, Matt knows that $50 in Thailand is the whole day $50 Sydney buys me lunch like That's why why you get the travel safer happen. Um, but he hooked him at the $1 but then he made five and and 15. A lot of really interesting and valuable. So how do you increase the average Bakr amount? So you want to create a slippery funnel with reward pricing and value? What that means is each level should be better than the last. We touched on this a little bit, but you want them to read the next level and be like she's had be stupid to get the previous level right. That's where you hook him at one, but then 10 everything else and cash for 22. It's only 12 more dollars, but I'm getting lots more than $12 worth of value, right? So the goal of each level is to get them to be interested in the next level and to feel like they'd be missing out if they contributed at the previous little. That's a little weird. Does that make sense? Okay, um, so any tricks to writing reward level copy, and they're definitely some tricks here, and most people screwed up. Um, I love writing. Reward the low copy starting with all caps, and you want it to be the actual reward in all caps. People get too clever and they make the Alice in Wonderland level or the, you know, whatever level or the blue level of the Purple Level or the Big Bang. The only thing that shouldn't be the actual thing is the no brainer level. We're gonna talk about that in a second, put the actual thing in all caps, and it doesn't have to be cool, sexy thing. You know why you do this? Because, like we said, 123 people skim down and their eyes look down those levels really quick. I don't but like next time you're looking at a Kickstarter project yourself, see what you do like caps, caps, caps can like, What am I actually getting? 13. You know, people don't have all day to sit there and read every bit of your Kickstarter, so they skim people skin. So do that reward level words and strategies, and then I'll pause and check the chat. Um, kickstart Exclusive. People love this stuff, right? Kickstarter only limited edition. Sometimes when it's a physical product, it doesn't make sense for film or photography, but I've seen people do Kickstarter green. You know, if it's IPhone case, sir, or whatever that makes something with the actual Kickstarter color. And there's only 100 of a maid super early bird and early birds so you can play with pricing. May be the 1st 50 people get your photography project or film project cheaper than everybody else, right? So you can play with Scarcity and Pricing LTD. Limited number right? You can you can limit each reward level. Kickstarter is like It's like this huge mixing board for smart marketers. And you can turn all these knobs, put that scarcity and turn the price up on that. All right, you can You can do just about anything. Um, discount, right? Just come from retail. Don't just price it below MSRP e. Remind them that you priced below. I'm SRP when you buy this. You know, when you watch this in the store are you know, when this calendar is published, you know it's gonna be $25 in the store by it here for 12 or by the digital version for eight. That kind of stuff, like remind them either the dollar amount or percent off, far below retail. You'll see a lot of successful projects. It'll save percentage, and I'll say, you know, retail $50 value. 22 you know, people skin. They want to see this stuff we're gonna talk about, plus everything above plus in their brainer level and then personal. So a. J. Leon did personal delivery. There's other cool ways to scale personal digitally. So you could say, um, a personal interview with the filmmaker. So maybe it like the $80 level they get to talk to you for 20 minutes or 1/2 hour on Skype. Right? Maybe that's worth it. You got a value on time and see when you do have free time. But somebody was really into this. Like, maybe that could lead to an interesting project for you. So I think personal stuff. People really like personal A jays project where for under $200 you got, like, everything in the kitchen sink, and he would come to you. You can imagine that appeals to his tribe very much because they want to meet him. Right. Um so a pause here, Any questions and share? We do have a lot of questions here about the pricing. And so you mentioned the strategies here. But here's a specific question from Modesto, and they say, when having items made for my rewards. What percent of the rewards should the cost of the item The, for instance, showed a $500 donation equals $50 cost for the reward. Is there a good ratio? I wouldn't look at it at The Excel actually helps with this. It helps model it out because it puts at each level what's the price? What's the production cost? What's the shipping cost, right? If the production is off a cinder block a cinder block, the shipping might be even more than you know. Like how heavy is it? So I wouldn't look at it at the reward level. I would look at it at the entire project level. Um, each line item is important, and like I said, the Excel helps with that. But I don't think there's a magic like you need to like. They're basically talking about profit margin, right? It costs X to make it, Um, I would look at it as the whole and then say what? You know how, how cheap can I get it? Where I'm happy and obviously the digital stuff. It's like fixed cost versus variable costs. Once you create these cool digital rewards, you're fixed. Cost is done and there's no variable cost. It's like, Have you ever sent in the dropbox links? So whatever you can keep keep digital specifically for photographers and filmmakers. We have a user named Yikes, and he actually was requesting a little bit of clarification. Just a little clarification on why we should price below msrp e with the risk fulfillment. Can you just review that? Sure. So there is no risk fulfillment in most of the transactions most of us do every day. Whatever you buy at the store, you're gonna get it. Sometimes you walk out of chipotle a sit down and I eat much poli. I'm not gonna give them my $10 like Sorry, we don't serve that anymore. Right. Um, you're gonna get what you pay for. And that's not necessarily true on Kickstarter ah, percentage of Kickstarter projects and kick starters doing everything they can do to reduce that percentage. That's why they make you jump through these hoops of like if you haven't done product design before. They wouldn't have let Soma progress. If it was just Mike's idea, they needed to see the production. They needed to see everything else. So the risk fulfillment is Is this thing actually gonna exist? And that's why you need to come in below MSRP valued valuable to the person purchasing it or yeah, I mean, you're compensating them because they're early there, early member of your tribe. Anyone who gives you money is a potential member of your tribe, and then if you delight them, they will become a member of your tribe. So there's this concept. I didn't put a slide together for it, but there's this concept called Lifetime value. Um, and an email is, you know, that's your best connection to somebody more than a Twitter follower or Facebook fan. Lifetime value is maybe they only backed this project at five. But if they're blown away by the photos we give them by the film that they download digitally, they might back your next project at 60. All right, And as we've seen, you don't need that many backers. I think there's one more here from the free minder in L. A they want to know for charitable projects. How should you structure rewards should that be approached differently than, say, if you're building a watch or a product doing something for charity? Does this all apply or should be structured differently? Yeah, it's a great question, obviously, Kickstarter. That's against one of their guidelines. So it's more of a General crowdfunding question on and you go going. Things like that, uh, other platforms that do allow sort of charity projects. It's a really good question. I would still try to say, like how you know, it shouldn't be like just the donation. You should still try to see again with this digital stuff. Create something once, and then be like you get. You get the whether it's the documentary or whatever. Like if it's ah, say it's a film. If the goal is to raise much money for a particular charitable cause, you can still offer the film you know, for a relatively small amount and then using the same slippery funnel, hooked them at a lower level. And then, if they really want to back that, if it's charitable, and then that additional component over the lower levels is the charitable component. Then you just have to tell that story. Yeah, low levels. Is there any benefit having just crazy high levels, like for a few donate $3000. I'll fly to you and give you a two hour personalized photo shoot or just something crazy. You know that that's like that's a great question. And the answer is, you have to think about your tribe and who they are if you if your tribe is a bunch of Donald Trump types who throw around that kind of money. But if your tribe is military families like, maybe they don't have an extra five grand to do at that level. So every project is different. Every tribe is different. How much disposable income they have. I think, if you can. So what matted with the trip saver app is he, um He runs thes tours in Europe that are always sold out because he's got this great travel, blogging everything else. He offered the tours for like $2000 normally there 2500 or three grand, and they sold out all six of them because he already had kind of a waiting list. So he was able to do some higher ticket things. But it wasn't just something he invented. It was something he knew there was demand for now, it doesn't cost you anything to put those levels together. But I think when when people read down that level, they usually like to get to the bottom and then they make the decision goes. Which level do I choose? So you gotta be careful to about too many reward levels. So if you're like, you know, we've all seen, like if they don't get to the bottom, they don't go back and donate to what they want. They close the tab, so you want them to get to the bottom, which is like a question of how many reward levels. You know, you can get away with 10 or 11 especially if the copy is sort of short, easy to skim. But I see people write their entire book, you know, like explaining everything. And it's available in purple, green and yellow, and it gets too long. You want them to finish and hit the bottom the thing, but and we're gonna talk about a little bit more. The big dollar reward levels, because they can make up for a lot of other ones. It still should be below MSRP e, so you have to show that it's 2000. But retail is 4000 and this could be interesting with, like digital stuff like films or building a website for somebody. I know somebody who they were creating a book, but normally they charge, you know, five grand to build a website, and they were doing it for two grand so they could do that. I called you felt like having a board that you're pretty sure nobody will want that will bump them back up. I think it's a bad idea to do that. You know, it depends on the project. With your specifically, you know, there's no like you're not you're not trying to hit the comedy thing or whatever, but, like, there's a great video called the Freak. Er, they can't bottle cozies. Can cozies like hand knitted by this crazy right? Isn't it one of the videos ever, But I would recommend nobody try to replicate it, Um, guys, amazing. But he because it fit the vibe of the brand of his project, he was like, If you bit id like you know, pledged $3000. $10,000. We're gonna come. We're gonna bring this truck to your town and have a grilled cheese party, because it was just like he was, like, this crazy hipster guy doing about knitted bottles. So it fit with the brand of his thing because it became part of the video and it became part of the reason to share it. I don't even remember if anyone contributed at that level. But it I would say only do the wild crazy levels if it gives you part of a story to tell. So I'm gonna keep him in on a little bit, and then you have a Yeah, sure, sure, Yeah. Eso The film I'm working on is like the third film in Like Siri's film, I have done the 1st 11 a lot of award, then the 2nd 1 is well, is still in the running. The 1st 1 is is like on the stream and stuff like you can stream it online and stuff on. Um, I was wondering, should I price it lower than what it streams for? Or should I just match like it? It's streams for like you know, for 99? Yeah. How can I get that size that That's a great question. And actually, with on these with the total disruption, one of the changes we made to her project is she had done a couple other films in the past. And so she sold him on our website. She had all the full rights to him. That's exactly what we did is I think they were to buy either one of them HD download on her site. So I said below, I'm srp we got to do it. Okay, so we're gonna make 17 99 and both for 10. So it's kind of her both her previous films for 10. And she didn't make a ton of money from those levels. Those people went down the slippery funneling, donated at a higher level. But if you think about mentally, they were hooked because they saw while I could get we live in public and these other films for only $10. Like, basically not minute a minute. Seven. A minute. 10. I'm gonna keep going. Right. Um, someone buzzed through a little bit of this and we might extend into the next section. So the power of plus so try to start reward levels with plus and include everything from the prior levels, especially especially with digital, especially with the stuff that's not the really high dollar stuff. This works up into a point until you get into some really interesting higher dollar higher reward levels. But the idea of pluses. You get the book in the digital download or the photography and whatever, plus every time they read the next level. If they see the word plus, it's this little it creates this slippery funnel and they literally slide down to the no brainer level. So the way to think about this is measured driving late at night. You're getting thirsty, so you pull over at the gas station to get some water and recharge, and there's a big ice been, and it says one bottle of water is $2. Two bottles of water is 2 50 What are we all going to do? We're all gonna buy two bottles of water, even if you don't need that second bottle water, even if you're only driving another hour cause the unit cost went from $2 a unit to 50 cents for the 2nd So do this with Kickstarter, with your award levels again, Number three. They read down the reward levels and see how he did, plus limited edition and private webinar. So for $32 you get everything above in the book and the people in the Mobi plus private webinar plus misfit pocketbook. You'll receive everything above plus. So we knew that the thing that that copy does to your brain as you're like, wow, getting a deal and then noticed 32 48 74. It's not jumping by $50 but you're getting you're getting an extra interesting thing. So a J build a perfect, slippery funnel, and as a result, he increased his average backer contribution. So people read down and then you create this kind of funnel and you funnel them to a no brainer level. Now there are levels above the no brainer level. The no brainer level is not the highest level, but it's the one that you want them to choose. So this is like the everything in the kitchen sink level. That's still a reasonable price for most people I eat under. Let's say $100. So we all understand calls to action. Or, if we don't see TA stands, were call to action on the Web. Every good website has a call to action button on Creative Live. It's live now that's that green button is what they want you to click play on. So the no brainer level is your call to action. Kickstarter does not allow you to put a green or orange button over on the plans and pricing thing would be interesting, but ugly if they did like, this is the one to buy. So you have to do it with pricing and with copy, right? And so that is your call to action. A couple examples really quick. So no brainer option. This is a J liens no brainer option. Um, and this is the only time where to put the reward level copy, not be the actual thing. Start with the no brainer option because you're telling everybody that is your orange button saying this is the one you want, right? Another example with sets notice for $76 he sold of that level at 111. The no brainer. Option 800 backers all gone. It was limited to 800 included this behemoth kind of thing. So put some time and thought into thinking, What is your everything in the kitchen sink level? Does that make sense? Yeah. Kickstarter website. The most common buys. I think $25 between the most common backer contribution level is 25. So you should have something interesting at the $25 level, But I like toe takes That's and then blow him away. That's because most people don't know this, right? So you want to make your average backer contribution, And I actually did the math on all mine. Um, they're more around 50 60 $70 average backer contribution because you do this slippery funnel, right? So you want them to look a 25 year? Yeah, I want that. But then look at 32 be like, Well, I'd be doing not to give 74 bucks, right? You already have their wallet. Your hand. They're just trying to decide how much. So how can you keep shipping costs low? We touched on this a little bit. So go faster. Stack the digital awards on top right fulfillment for digital, easy and free. So you want to think about above a certain level. Maybe it's 25. Maybe it's whatever. Above that, it's digital. You don't even need to collect their shipping address. You just send them a dropbox like to their email, and it's done below that. Once you have to collect their shipping address, it doesn't matter if you shipped in a shoebox or an elephant, you have to collect the shipping dress. HD Digital download may be more valuable than a DVD Look around MacBook Air MacBook Air. I have a Mac book air, right? They watch in 2008 and they don't have a DVD drive. I don't have a DVD drive. I don't want to pay more for your DVD than your digital download because I can't play it. I don't have, you know, maybe in the car. I don't know. Um, same with ipads and tablets, right? Everything is digital where mobile were on the go. Don't give him a physical disk unless, you know, maybe military families may depend if doing something for maybe for older people maybe think about a DVD, but if at all, possible. I keep it as digital is possible. A good example of digital. Um, this is Stephen Press Field. Highly recommend anyone. He's the producer of the writer of The Legend of Bagger Vance and one of the best books ever. The War of Art. Not the Art of War. The War of Art. Um, this is just an example from his check out page. I just snagged it because it's a great example of fulfilling digitally download all the files in this zip archive, I put IPad nook e reader Kindle, pdf audiobooks. Everything. You can deliver something like this and with all those levels people like, Wow, that's interesting. That's great, um, and when? And you can also do instant fulfillment. So if this stuff is pre created like some of the film is done or extra scenes, you can send it to him. As soon as the project is done, Kickstart gives you their email. What's another way to delight? The person is the day after Kickstarter like Boom. Here's your digital download of the film. You win, you know, like that's great. That's the opposite of the public. What shipping? A year and 1/2 late, right