[Editor’s note: This is the latest in a three-part
series of articles covering music project
fundraising; see previous installments in our
August and October 2014 issues.]
One of the most popular ways for
musicians to raise money for their projects is
crowdfunding. Whether it’s to cover the cost
of producing your next album or to make your
tour happen, crowdfunding not only generates
dollars, but also helps get fans involved in
your projects. When run successfully, a
crowdfunding campaign can capture your
backers’ enthusiasm and help spread the word
to other people—which can bring in even more
money and build your fanbase.
Planning and sequencing a crowdfunding
campaign correctly will help you maximize
fundraising. But another component you need
to consider is setting the best mix of rewards—
ones that encourage backers to pledge the
most dollars to your project. Setting the right
mix means you’ll get more pledges from more
people, encourage your backers to pledge at
higher amounts, and help you achieve your
goals (and stretch goals) quicker.
Reward “Don’ts” Before considering the
reward levels, you will want to keep in mind
some pitfalls that can discourage pledging
or cause you to lose money—and they aren’t
always obvious. Avoid these mistakes:
Don’t offer a reward that costs more in
funding donations than the price someone
can reasonably pay elsewhere. For example, a
digital album reward should never cost more
than it costs on iTunes.
Don’t forget to factor in shipping costs!
Don’t ever offer a physical reward for less
than $25 that requires shipping. Otherwise,
the shipping and postage costs will eat your
profit. Instead, offer only digital rewards—
downloadable MP3s, digital posters—for
your lower priced rewards. The key price
point where you can offer physical goods as
rewards—a CD, a printed poster—is typically
around $25-$30. But that reward should fit
in a 6"x 10" padded envelope and weigh less
than 3 pounds. As reward limits grow, size and
postage options can grow, but keep in mind,
every dollar paid toward shipping a reward is
a dollar that’s not going to your project.
Don’t have large price gaps between
rewards. Offer your backers many different
pricing options and reward levels to choose
from. Each backer is different—some can’t
afford to pledge too much while others can
afford more. Your goal is to provide options so
you can help people find the level they’re most
Don’t make top rewards open to many.
A $10,000 reward should only be offered to
one person, for instance. You want to keep
them limited so you introduce scarcity and
competition. This encourages pledging.
Setting Reward Levels How do you get
people to pledge more than just a $1? What
inspires them to pledge higher amounts? The
answer is in the types of rewards you offer and
the pledge levels you set. Be creative. Offer a
lot of special and limited-run rewards at ever-increasing
levels—from as low as $1 to as high as
$10,000, $25,000, or more.
To get the most out of your pledges, follow
Set $1 Rewards: Always have a $1 reward!
This level hooks the people who are only
casually interested in your project. The point
is, once they become a backer, crowdfunding
platforms allow you to message them, and with
each update you send you’ll get more chances
to upsell them to a higher reward. If you
follow our advice from earlier columns, you’ll
be sending messages when you’re close to
achieving each goal—not just the first goal, but
the stretch goals as well. You might influence
a backer to pull in other people to help the
project succeed. For a good, low-barrier $1
reward, try offering a single downloadable
Set $10 Rewards: A $10 reward is the
perfect price point for a downloadable digital
album. But don’t just offer the exact same thing
that someone can buy at iTunes or other digital
stores. Add something extra so it becomes a
true reward. For example, an additional song,
or a downloadable PDF of your lyric sheet.
Set $25 Rewards: Data shows that the $25
reward is the most common pledge, so offer a
variety of rewards at this level to capture this
special price point. This is also the first level
where you can consider non-digital rewards.
But if you do so, make sure to offer at least two
$25 rewards: a physical reward that you can
mail and a digital reward equivalent that you
can dub the “save-the-earth” version. Push the
non-physical rewards that you don’t have to
ship—they are better for the earth, and better
Setting Rewards Greater than $25:
Prepare a graduated set of rewards for levels
greater than $25 all the way through $500
or so. For these levels, there’s no end to the
type of rewards you can create. Offer previous
albums or rarities from your back catalog.
Create various packaged rewards—different
CD cases, vinyl, USB drives, etc. Offer a
souvenir photo book of the “making of” your
project. Offer to add funders’ names to a
“thank you” page in the liner notes. You can
also let fans buy some control. For example, let
backers who pledge $100 or more a chance to
vote for the album art (from a pre-selection)
or create a setlist for a tour stop in their city.
Mix and match the rewards to create bundles
at various price points. Also, don’t forget to
continue to offer digital-only rewards at these
Setting the Top Rewards: Always include
multiple high-level rewards. Some fans really
do donate at these levels; you need to ask.
Also, offering high-priced rewards makes the
moderate-level rewards—$10, $25, $50—seem
more affordable. Personalization options are
most appropriate for those who pledge the
largest amounts. For example, you can offer
backstage access, or a day with the band,
house concert, or party. Think big, but don’t
over-commit yourself to something you can’t
do. Believe it or not, someone might fund your
$10,000 or $25,000 reward…it does happen!
Before locking in your rewards, research
other successful crowdfunding campaigns to
find out what worked for others. And don’t
limit yourself to referencing musicians—ideas
can come from any type of crowdfunding
campaign. Also, sometimes giving clever
names to each reward level can get people to
By following these crowdfunding reward
tips (and avoiding the common mistakes), you’ll
increase the odds of pulling in higher pledge
amounts and achieving your project goals.
Randy Chertkow and Jason Feehan are
authors of The Indie Band Survival Guide (St.
Martin’s Griffin), now in its second edition.