Any Madison Avenue mad man/ mad woman will tell you that selecting the right price-point can maximize profits. The same goes with the Kickstarter campaign for your novel.
I’m guessing there are more schools of thought for pricing than there are transistors in my phone (that’s a lot), but in the spirit of the laboratory experiment I’ll share with you the strategies I’m using and later I’ll edit this post to evaluate how they worked.
A Ladder, Not a Cliff
The most important thing is that you offer evenly spread-out reward prices. If you have too many reward levels within a few dollars of each other, it will look like a jumble and people might shrug their shoulders and walk away. Likewise, you should avoid huge jumps: I might have $40 in my pocket that I’m willing to spend, but if the only options are $20 or $100 then you’re not likely to get the right amount from me. Each pledge level should be like a rung of the ladder, evenly spaced and logical in their layout.
The critical thing is that whatever level a backer selects, s/he should be tempted to go up to the next level. For a novel, this means you should try to space them out by $15 to $25 dollars (so your reward levels might go $10, $20, $40, $60, etc). After the $75 or $100 mark, you can jump up by bigger increments because the high-end backers probably already know what they want to spend.
End in 0 or 9?
We all know that $9.99 is essentially the same as $10.00, yet year after year consumer shopping habits prove that psychology trumps logic. Yet Kickstarter seems to have a tradition of ending prices in 5 or 0—I don’t know why. Maybe project creators should jump on the 9 bandwagon (and many do).
I’m experimenting with this in a few different levels: I had originally set the “Creature Feature” level to $60 and the “Mad Doctor” level to $70, but I knocked a dollar off each. I kept the other pledge levels at nice round numbers, and I’ll compare the patterns of backers on this campaign to my last Kickstarter to see if there is a greater percentage of pledges at these levels. Of course, lots of factors will influence this, but it’s worth a buck for a chance to find out.
The Value Level
If you have a level you would prefer your backers to select—perhaps because it holds a higher profit margin for you or perhaps because you simply think it’s your most awesome stuff—then you might want to consider this strategy. First, price the desired level attractively and consider ending in a “9” even if your other prices are round numbers. Then, for the next level, bump it up 5 or 10 dollars even if the reward isn’t that much better—maybe especially if the reward isn’t that much better.
The idea is that potential backers will look over the options and decide that they’re getting a much better deal with the reward level you want them to pick (and they probably are). It’s a controversial tactic, but some very successful Kickstarter creators swear by it.
The Low-Level Pledge
Should you have a $1 pledge level or not? One school of thought is that you’re going to get a bunch of backers that you might not otherwise get, and those backers might increase their pledges later, bring in friends, or back future projects. On the other hand, it might draw backers away from higher-level pledges. Who’s right? Nobody knows. Last time I had 8 backers at the $1 level. This time, I have no $1 level but I have a $5 level—if I get 2 backers at that level, I’ll know it was worth switching up. Furthermore, if people see that they get one short story (plus stretch goals) for $5 and a whole eBook novel (plus stretch goals) for $10, they might bump up to the $10 level. I’ll let you know how it goes!
Pre-determined rewards FTW
Sure, anybody can pledge at any amount, but almost 100% of my backers pick one of the pre-determined levels and I’d bet it’s the same for everyone. Pricing them right and using an advertiser’s arsenal of psychological tricks can mean the difference between soaring high and falling short.