How to Do It Right
Successful Kickstarter campaigns surpassing their stretch goal by a record-breaking margin often make the news, inspiring new ambitious creators to join the platform. However, 60% of all projects launched didn’t reach their desired goals.
As for now, Kickstarter has helped 229,154 projects to be successful. Since its inception in 2009, Kickstarter has received a total of $6.94 billion in pledges becoming the most well-known and largest crowdfunding platform.
Kickstarter crowdfunding has made a name for itself as a viable alternative to other seed investments to obtain early-stage funding for a project. Nonetheless, only 40.13% of the launched projects reached their desired goal. As a result, the Kickstarter success prediction became highly interesting to all parties involved.
Making the Kickstarter success prediction early in the project’s lifecycle, or even before the launch, will allow Kickstarter to increase the promotional activities of projects that most likely will not succeed. At the same time, the project creators can adjust their campaign strategy if needed, and backers will know what projects will waste their time.
So what are the secrets to Kickstarter success, and how to accurately predict the future of the campaign?
This article will provide everything you need to know to answer these questions.
Metrics To Pay Attention to the First
Given the all-or-nothing policy of Kickstarter, the funds raised are paid out only if the campaign meets its funding goal before the deadline. It means that more than half of the Kickstarter creators went home empty-handed after investing lots of time and effort in setting up and promoting their campaigns. While they had a financial and reputational setback, the backers of those projects got disappointed as they missed out on a product they were interested in. Undoubtedly, the outcome was undesirable for both of them.
So understanding the metrics for Kickstarter success prediction will surely provide immensely valuable information to all the involved parties.
According to Ethan Mollick, an AP at the University of Pennsylvania, high-quality signals implicate a high possibility of Kickstarter campaign success. By high-quality signals, he meant:
- the presence of a video on the campaign’s page
- the frequency of the project updates
- the number of spelling errors in the description
He also states that the longer the campaign lasts, the lower the chance of success. So Kickstarter creators need to refrain from letting greed take the upper hand and think carefully before setting the funding goal and length of their campaigns. It’s also essential to have a realistic project goal.
And guess what? The location of the project is also linked to the Kickstarter crowdfunding success.
Surprisingly, the language used in the project’s description, updates, and comments have solid predictive power. So to drive the ‘crowd’ to take campaigns to their funding goal, the creators must pay close attention to the phrases they use to pitch their projects.
- The phrase “good karma” is one of the top predictors of successful funding.
- The phrase “December of” is in the top 100, signaling the Kickstarter project’s success. The phrase talks about the campaigns scheduled for December of a particular year.
Let’s also remember social media platforms. How can they be handy in the Kickstarter success prediction?
Every creator knows that promoting their campaign is of the utmost importance. Social media platforms are crucial to this process, given the number of users that are active on these platforms and the simplicity with which they may share the messages.
Besides, testing your idea on Prelaunch.com to predict the success of your project more accurately will b a good start before going all in. It’ll help you avoid wasting your time and money on developing a product that’s not likely to succeed. Moreover, you’ll be able to find out if your product is demanded in the market, decide on its price, and receive early feedback from your target audience. Prelaunch.com also provides you with valuable analytical and statistical data for you to make smart, data-driven decisions.
Now let’s discuss the metrics that’ll help you in Kickstarter success prediction.
The subscription rate is the first metric to quantify market demand. The subscription rate measures the percentage of your landing page visitors that convert or sign up in response to your campaign. More specifically, it helps you to detect the number of people who respond by signing up out of all the people that see your call-to-action button.
On Prelaunch.com, you can build your landing page and validate your product idea before developing it with the 2-step validation method. It’s straightforward and does not require any programming or design skills.
The first step is market validation. Here you find out if there’s demand for your product by collecting subscribers on a landing page without mentioning the price.
To calculate your subscription rate, you must divide the number of new leads by the number of total visitors. Comparing it with the benchmarks will give you more insights into the effectiveness of your landing page and overall market demand.
Remember that targeted and relevant traffic is essential. Quality leads are more likely to result from quality traffic. So the more such traffic you get, the higher the subscription rate.
Cost Per Lead
Another vital metric in Kickstarter success prediction is the cost per lead. It’s the money you spend to acquire a new subscriber and will help you estimate your market interest and allocate your budget better.
A lead is a person who has visited your landing page and expressed interest in your product. While your lead might not buy something from you in the future, generating qualified leads is still essential. They still have a higher chance of turning into a paying customer. The cost per lead is a simple yet significant marketing metric allowing you to measure the effectiveness of your spending in relation to generating new leads.
So to understand how much it costs to generate a new lead, you have to divide the total amount spent on generating traffic to your landing page by the total number of new leads. This metric tells you what you should invest in getting a qualified lead. The lower the cost per lead, the higher the chances for your Kickstarter campaign success.
Pay attention to the timeframe of your spending and the number of new leads. They have to be the same to ensure an accurate result.
The second step is price validation, which can be done with the help of the reservation page. The reservation page is a redirected page after subscription where your visitors pay a small price to get some early bird bonuses after your product launch.
The reservation page’s primary goal is to test your product’s price by the number of reservations. In other words, it helps you understand how many people will buy your product at a price.
The first metric you can use when measuring the actual purchase behavior of your potential buyers is the reservation rate. The reservation rate measures the percentage of your landing page visitors responding by signing up, taking an additional step, and monetizing your idea.
To calculate your reservation rate, you have to divide the number of people who made a reservation by the number of total visitors to your landing page. Above the average rate will indicate that your product idea and its price are well thought out and competitive.
Comparing your reservation rate with your subscription rate will help you differentiate your supporters in terms of commitment.
Cost Per Reservation
It would help if you calculated the cost per reservation to track down the money you spend per new reservation. This metric shows how much you paid to have a visitor who showed readiness to purchase your product.
By dividing the total amount spent on generating traffic to your landing page by the total number of reservations, you’ll be able to calculate the cost per reservation. This metric is of utmost importance because your Kickstarter campaign success heavily depends on the people willing to pay for your product.
Generally, the success of your campaign can be predicted by thoroughly examining these four metrics:
- cost per lead
- cost per reservation
- subscription rate
- reservation rate
Prelaunch.com offers you an easy-to-use dashboard to get detailed conversion rate analytics. So you can base your Kickstarter campaign success prediction on data and considerably increase the accuracy of your prediction results.
Moreover, with smart benchmarking, you’ll be able to compare your metrics with 100s of products launched in your category. Comparing your results to the industry average will help you evaluate the performance of your landing page, find improvement spots for the future, and, eventually, predict your Kickstarter campaign success.
Daily Spend and the Number of Page Visitors
Daily Spend is another factor that will provide valuable insights. It’s the amount you spend daily to drive traffic to your landing page. The good minimum daily budget varies depending on the market and target audience. However, the four main metrics discussed above are just some of the ones you should pay attention to.
Usually, the tactics for driving high traffic to your page are pay-to-play, meaning the higher your daily spend, the bigger the number of page visitors. Although, when you consider the factors like competition and location, that’s not always the case.
However, increasing the number of your page visitors only sometimes results in a higher conversion rate. Most of the time, a decrease in the relevancy of the traffic can be noted. The significant decline indicates the increased possibility for the campaign to be successful only in a niche market. In other words, you won’t be able to scale your campaign. In this case, targeting your audience accurately becomes more and more important. Otherwise, you will waste valuable resources as your product is meant for something other than the mass market.
Nonetheless, your product price also plays an important role here. You don’t want to increase your Daily Spend to reach your target audience and end up not generating enough revenue as your product price is not high enough.
Consequently, the size of your audience and the scalability of your campaign become very important.
Audience Size and Scaling
When scaling your campaign doesn’t result in higher or constant conversion rates, you can conclude that the size of your audience needs to be bigger. If that’s what you’re opting for, you still might have a successful Kickstarter campaign. However, it would help if you also considered your costs and product price.
Crowdfunding Previous Experience
Another factor influencing Kickstarter’s campaign success is the founder’s previous experience. By repeatedly creating projects on Kickstarter, founders can gain valuable experience and skills. They can learn how to make and present potentially successful projects. So eventually, their chances of success increase.
Moreover, the experience of the creator lends credibility to the project as well as to the founder. It also mitigates information asymmetry concerns about project quality, enhancing the project’s likelihood of attaining funding.
Credibility is a significant factor in Kickstarter project success, as backers always rely on the observable characteristics of a campaign to avoid scams. The founders’ previous experience in crowdfunding or product creation informs about their ability and experience in developing a project and realizing a successful outcome.
Besides the previous experience of the creators, some other factors increase the project’s credibility, such as the personal LinkedIn profiles of the team members, the articles about the product or the creators, and having specific certifications. As we’ve already mentioned, backers are looking for some reliable information on which to base their funding decisions. They tend to trust the creators who show themselves and don’t try to stay anonymous online.
It’s unlikely that your product will be an ideal choice for everyone. Therefore, it’s important to determine your target audience and make your product worthwhile. Effective product positioning will ultimately lead to Kickstarter crowdfunding success.
How your product is viewed in terms of benefit by your target audience depends on your product positioning. Product positioning defines where your product fits in the market and why it’s the best solution for your target audience. It’s about making your product stand out in the minds of your potential customers by highlighting a unique element that sets your product apart from the others.
Everything starts with identifying who the potential customers are and what their needs and pain points are. After this, you’ll have to analyze your strengths and weaknesses carefully. Remember, you are not alone in the market, so you’ll have to study your competitors and understand their strategies. If you’re planning on launching an innovation with no direct competitors, remember your indirect competitors. The next step is understanding the positioning of your competitors. Try to determine how your target audience perceives the products of your competitors. What image do your prospects have of your competitors? What makes your competitors unique in the market? The last step is working on your product differentiation. It is how your potential customers will distinguish what you sell from what your competitors do.
Positioning effectively means communicating the right message to the right people. You want to present your project from the best-working angle and trigger the interest of those who will find your product helpful and valuable. Otherwise, you can forget about Kickstarter crowdfunding success.
So to check your product positioning, you’ll need to find the answers to these questions:
- Is your target audience well-defined?
- Do your marketing messages resonate with your prospects?
To get more data-driven insights, you can use Prelaunch.com to target different segments, test your campaign with different marketing messages, and eventually find the best ones.
Check out the example of the Kickstarter campaign of PomaBrush – The Most Powerful Silicone Electric Toothbrush. While now positioned as the coolest minimalist toothbrush, in the beginning, it was only meant for travelers. Before launching the Kickstarter campaign, they first tested their idea on Prelaunch.com and identified that highlighting the minimalist design of the toothbrush would lead to better outcomes. And they were right. Changing their product positioning resulted in Kickstarter crowdfunding success.
Testing the price of your product before launching your campaign on Kickstarter will allow you to select the price your potential customers are willing to pay. No more, no less. So pay attention to the importance of price validation during Kickstarter success prediction.
For instance, KittySpring’s Kickstarter campaign decided to validate its price on Prelaunch.com to avoid undesirable results on Kickstarter. They noticed that people were interested in their product but wanted to buy it for something other than $24. However, KittySpring performed overwhelmingly better priced at $35. The higher price matched their expectations of what a non-electric and whisker-friendly water fountain should cost. As a result, with the help of Prelaunch KittySpring raised over $700k on Kickstarter.
Time is money for crowdfunding, especially on Kickstarter, as your campaign will only get something if it reaches its funding goal. It makes the Kickstarter success prediction of the utmost importance.
In this article, we’ve discussed all the factors you must focus on to improve the probability of crowd-sourcing your desired goal amount. Remember that a solid start will often prove vital for your future success.