Why Backers Are Your Most Valuable Assets
The funds you raise on Kickstarter are extremely valuable, but you will mostly spend that value in the short term. The reason being, in crowdfunding, “every dollar you ‘raise’ must be repaid with a product.” Ben Einstein’s quote captures the reality that you will spend most of the money you raise on manufacturing and fulfillment.
If you plan things out well and have an accurate understanding of your costs and margin, you might have some money left over to invest in growing your business or claiming as profit.
The value offered by your backer community is of a completely different nature. It is built up slowly over time and has the potential to last much longer than the funds you raise. It shows up as backer loyalty and advocacy, and it can become the most valuable asset you build from your campaign — a fertile foundation for your business’s future to grow.
Customer satisfaction is a well-established indicator of a businesses’ health
Customer loyalty and advocacy is a widely accepted indicator of a company’s health. Large- and medium-sized enterprises invest a lot of money to track metrics that assess their performance in these areas.
The two most common approaches that I know of are:
Net Promoter Score (NPS). A survey-based methodology for measuring the likelihood that a customer will recommend a company’s products and services to others.
Customer Lifetime Value (CLV). A data-based methodology that assesses customers’ value by projecting the revenue they will generate over the life of the relationship.
It’s not just about metrics.
For smaller companies, a focus on customer satisfaction doesn’t usually involve fancy models or complex research initiatives.
The most successful creators and companies that continue to embrace Kickstarter as a product launch platform place tremendous importance on customer satisfaction. The likes of Peak Design, Moment, Lomography, Calamity Worldwide, CW&T, and Prep’d.
I can attest to their focus on customer and backer satisfaction from conversations with their founders, and my personal experience as a backer and customer.
It takes more than a good product to transform your backers into advocates
A common assumption that creators make is that it all just boils down to their product quality. Shipping a product that delivers on the vision you sold to your backers is essential. But, if you aim to transform your backers into loyal advocates, then it’s not nearly enough.
Your backer’s perception of your product will be influenced by their experiences with your team, your company, and your product. Here are just a handful of the touchpoints that matter: social media posts and presence, online ads, industry events, press articles, campaign page, project updates, email newsletters, support interactions, and the list goes on.
Let’s dive into a few examples to bring this reality into focus.
How a production flaw strengthened the bonds between Peak Design and its backers.
When the Peak Design team started to fulfill the rewards for their Slide & Clutch campaign, feedback from their backers helped them uncover a severe issue with the first batch of products shipped out. The anchors that attach cameras to their Slide straps were not working correctly. In worst-case scenarios, this meant that cameras could drop.
Here is how the Peak Design team described the seriousness of the situation:
“We are in the business of carrying your cameras, not dropping them. I suspect we will not be in business if we cannot entirely contain and eliminate that risk, which is why it is our top priority.”
As soon as they discovered the issue, the Peak Design team informed their backers about the situation and shifted into high gear to find a fix. It took them weeks to find a solution and another week to start shipping it out. During this 5-week window, they remained in constant contact with their backers, publishing eight updates in total.
The solution they came up with involved giving backers a choice. Backers could get a repair kit that would enable them to fix the issue independently or have their product replaced by Peak Design. Most of the affected backers opted for the repair kit.
The end result: Peak Design was able to forge stronger bonds with their backer community. It demonstrated that their team stood behind their product and was committed to making things right. In their own words: “we will never leave you high and dry.”
How a fulfillment issue converted a frustrated backer into a loyal fan and friend.
During fulfillment for the Things-Could-Be-Worse Tea Set project, the Calamity Worldwide team discovered that the first batch of rewards got shipped without being properly packed. They quickly identified the issue and worked diligently with their fulfillment center and factory to resolve it. Even so, over a thousand rewards had already been shipped out. They knew that some backers were going to receive broken teapots.
Within a few days, they received an angry email from a backer. The backer was frustrated about receiving a broken teapot after waiting many months beyond the expected delivery date. Their sarcastic tone displayed doubt in the creators’ ability to make things right.
The Calamity Worldwide team responded with a caring, thoughtful, and candid response. They acknowledged the backer’s frustration, reassured them that they would receive a new teapot, provided context about how crowdfunding projects work, and shared a candid account of what happened.
Their response demonstrated to the backer that a human being on the other side cared about their experience and was committed and empowered to make things right. This human interaction generated empathy and trust from the backer and led to exchanging gifts between the backer and the team at Calamity.
The end result: the Calamity Worldwide team converted an angry backer into a loyal customer who has gone on to back many other projects. This situation even sparked an on-going friendship between the backer and one of Calamity Worldwide’s co-owners.
How a fulfillment delay turned a Canopy customer into a detractor.
This last example comes from a personal experience that I recently had when buying a humidifier from Canopy. This story illustrates how negative experiences with a brand can significantly impact a person’s perception of a product.
Even though this example highlights a customer — rather than a backer — experience, I decided to share it here because it demonstrates how a negative backer experience can cast a long shadow, especially for a startup.
On December 6th, 2020, I ordered three humidifiers from Canopy; the estimated ship date was the week of the 15th of the same month. On Friday of that week, I reached out to Canopy to inquire about the state of my order. A few days later, I received a reply informing me that my order had shipped out. They went on to tell me that the packages were already in UPS’s hands and that I would receive a tracking number by the end of the day.
Fast forward to January 3rd, having not received a tracking number or the packages, I reach out to the Canopy team once again. It takes them a few days to reply, and when they do, they provide a troubling response — they needed to check the status of my order with their warehouse and couldn’t be sure how long that process would take.
A week later, after additional follow-ups from my end, they finally informed me that my order has not yet shipped out, but they promise that it will get out by the end of that week.
I think you can probably guess what happened next. My order never shipped out, and it took multiple requests across several days to get my order canceled.
The end result: I will never purchase a product from this company again, and do my utmost to make sure my friends don’t either.
The worst part of my experience was dealing with their unresponsive and incompetent customer service. The truth is, I would have canceled my order even if they had responded to my emails promptly and accurately because I needed humidifiers for our home right away. But, I wouldn’t have felt disrespected and antagonized, and I wouldn’t be actively recommending that people avoid Canopy like the plague.
Backers are different than customers
When someone backs a Kickstarter project, they are helping to bring to life a new product rather than purchasing a product that is already in production.
That’s a pretty big deal.
Here are a few examples of what this difference means:
- Rather than being able to try your product, backers take a leap of faith that it will deliver on the promises you make on your project page.
- Rather than get 2-day shipping, backers accept that it can take anywhere from a few months to well over a year for a product to ship.
- Rather than get a money-back guarantee, backers take on the risk that a project might stumble and fail to deliver the product they set out to create.
These distinctions present unique opportunities and challenges. To tap into the former and mitigate the latter, here are the two most significant things that you need to realize about your relationship with backers:
- Your backers are embarking on a journey with you.
- Your backers are your product’s early adopter community.
Let’s dive a bit deeper into each of these.
Your backers are embarking on a journey with you
On crowdfunding platforms, it takes many months, sometimes over a year, from the moment a backer pledges to a campaign to the moment that they receive a product. It’s helpful to think of the time that intervenes those moments like a shared journey; the product is the destination.
After the funding campaign, it’s normal for most of your efforts to be focused on the engineering, production, and logistical work required to ship a high-quality product. However, it’s essential to also invest in your backers’ experience throughout their journey with you.
This post-funding journey is essential for transforming backers into advocates.
It offers a unique opportunity for you to nurture relationships with your backers. The work involved is akin to cultivating a garden. It requires effort and care over a long period. The goal is to create fertile ground for your future success.
Developing relationships with your backers will help you deal with the inevitable issues and delays that occur in every project. It will shape your backers’ perception of your team and influence their receptiveness to your product. And, it will serve as a foundation for converting them into fans and loyal customers.
Neglecting this work can have a pernicious and long-term effect.
It can lead to the gradual erosion of your backer community’s trust in your commitment to the project and your ability to deliver. This discontent often surfaces through flare-ups in public comments or social media. Putting out these fires can take a lot of work and may leave permanent scars.
Your backers are your early adopters
Your Kickstarter backers are your products’ early adopters — whether you are launching a beautifully-designed solar-powered light or cleaning products with a conscience. Early adopters differ in some critical ways from other customers. But, before I dive into those characteristics, let’s briefly explore how new products.
The Diffusion of Innovations model, published by Everett Rogers in the early 60s, is still the most widely accepted model of adopting new ideas and technologies. It provides a handy rubric for thinking of the adoption of a product by a target audience.
This model is often illustrated as a bell curve that is segmented into five phases across the axis of time. Each stage represents adoption by a group with different psychographic characteristics. For our purposes, we’ve simplified the model a bit (we’ve joined the first two groups into a larger early adopter group).
Now let’s explore the significant characteristics of early adopters:
Backers are more knowledgeable and care deeply about the problem that your product tackles. They are well aware of the readily available solutions and are interested in products that open up new possibilities, as a new Ultra-Wide Art Lens. Or they have a deep interest in your product category and are on the lookout for new standout creations to upgrade to or add to their collection.
Backers are willing to take a risk on an unproven product. They can be swayed to back your project if your product offers the right mix of functional benefits, standout aesthetics, coherent values, and overall uniqueness. This risk extends beyond the question of whether your product will be as good as you claim; it also includes the possibility that even well-intentioned creators can fail to ship at all.
Backers are more forgiving of product or process imperfections and alterations as long as the product and your team live up to your promises. This matters because products continue to evolve in the final steps leading up to manufacturing. Also, the first manufactured iteration of any product will likely have some glitches that arise from the unintended impact of design choices or hiccups in the production processes.
Backers often provide input that can help you fine-tune your product. They usually have pretty strong points of view since they are well informed about your product category. The direct lines of communication between your team and your backers facilitate the flow of feedback. The Primo Toys team leveraged the feedback from their first campaign to create a highly-successful, more polished version of Cubetto.
Backers can help to get the word out about your product. Their high-level of interest in your product, and the problem it solves, often means that their recommendation is considered credible to their friends and peers. They are also more likely to be connected with other members of your target audience.
How strongly your backers will display early adopter characteristics will vary depending on your project’s specifics. In general, products that are expensive tend to rely more strongly on backers with solid early adopter tendencies. Products designed for communities of practitioners, such as photo gear, digital fabrication, and music instruments, also rely on backers with strong early-adopter characteristics.
Here is a quote that brings to light how Peak Design views the difference between backers and customers. You’ll hear a lot of echoes of the early adopter characteristics we just covered.
“The customers who buy our products through Kickstarter are so freaking great that Kickstarter has developed a special nomenclature to explain how awesome they are.
“First of all, they’re not just customers, they’re backers. They don’t just pre-order your products, they pledge to your campaign. Backers don’t just like our products, they like our story and they like us too. They follow us, share their feedback with us, and share us with the world. They help us improve our products and they help each other use our products. They pledge to our Kickstarter campaigns not just because they want to be the first to get our latest product, but also because they want to see us continue designing more products in the future. They celebrate our victories with us and they empathize with us when we screw up.”
Check out the full blog post, Love Thy Crowd.
Peak Design has done a phenomenal job at tapping into the power of their backer communities. They understand the value of backers like none other, and they’ve been able to reap the resulting benefits.
How do I tap into this power?
I hope I’ve been able to convince you that it’s worth devoting a substantial amount of time and effort towards delivering an excellent backer experience. It is an essential investment if you aim to build long-term value from your Kickstarter product launch.
In the second piece in this series (coming soon), I provide a high-level framework for how you can tap into the power of your backer community. I’ll walk you through the steps you must take and the values you’ll need to embrace.
