3rd Party Backer Solutions
I was planning on doing a blog on videos this week, but as with many things this year, something else jumped in front of the queue – picking a backer interaction solution.
Kickstarter is an amazing platform. It is clearly one of the business revolutions of our time. That said, it is not Microsoft or Apple. It is an odd bird.
For a tech company it is not in the same league revenue-wise with companies that have 1/100th the social or business impact. There is a loooong blog entry I can do there, but I’ll summarize that KS is not the type of company that many think it is and it’s not minting an army of millionaires and spewing cash all over the place. The venture capital backers that put $10M in to KS in 2009 would have likely made a better return if they invested their money in the Dow Jones Index at this point.
This is all my nice way of saying “don’t be surprised if KS doesn’t do everything perfectly for your venture.” And one area they are sadly lacking in is creator support AFTER funding. The model now is that you send a survey through KS asking for needed info to get rewards to backers and that is it. The survey is lacking in features and you can only send it once. Just recently KS made it so backers can update their address responses after the survey is filled out (people move). This is a nice feature, but it’s one creators have been waiting for – for a long time.
In the vacuum of proper support, some creators have created custom software that allows them to better communicate with their backers when campaigns end. And since smaller companies don’t have the resources to custom build software, 3rd party solutions have popped up to help small and mid-sized companies. These solution-companies offer a variety of services, but to creators the most important are these;
1) Get out of the Kickstarter survey system. Instead of having backers fill out information on the KS survey, the only bit of info you need is their email address. Then, you can send the backers a custom survey through the 3rd party solution.
2) Ability to handle changes. Once the backer is in the system, they can change their reward selection at any time. This is particularly helpful with add-ons offered during the campaign.
3) Make shipping easier. Many of these programs can output directly to thermal shipping label printers and some connect to on-line postage offerings like stamps.com. Some can print out “pick and pack” slips as well which is super helpful for complicated campaigns with lots of options. Some even have custom outputs for popular 3rd party fulfillment houses (fulfillment houses actually DO your shipping for you, at a cost of around $2 a package + shipping cost)
4) Up-Sell. This is probably the most important feature. It allows your backers to RAISE their pledge level and add to their order. The things you upsell can be from your campaign or from previous campaigns (or really anything). Big campaigns can end up with 15-30% of their total revenue coming from these up-sells – they are a BIG deal for lots of people.
5) Backer Management. Most of these services offer much better management tools than KS. This includes immediately after your campaign and at other points during your fulfillment timeline. In addition, they offer good ways to let your backers connect with your company through mailing lists and other methods so you can keep in touch with backers who hopefully will become life-long customers.
These 3rd party solutions cost money to use, but you hope to make it up in saved time and most importantly with up-sells. There are four different “moments” when you could be charged with a fee.
Fee #1 – Set-Up: Most are free, but at least one charges a set-up fee to even start.
Fee #2 – % of Money Raised on KS: Some charge 1% for money you already raised on KS. This is basically a fee to use a better tool.
Fee #3 – % of Money Raised after the KS: This is money from add-on and up-sells that you get when you send your survey. In addition to the fee from the 3rd party, there is a fee for credit card handling. Most use a charge solution called Stripe which charges 2.9% + $.30 per charge. As Amazon – the default payment solution through KS – charges about 4%, this seems very reasonable. It’ll be a bit more expensive on smaller charges (less than $25), and bit less on larger ones (more than $25), but it’s close.
Fee #4 – Web Sales: Some solutions go a step further and create a web-store for you along with blog widgets and other tools that allow you to take orders completely outside of the KS system. This is good for folks who missed backing both prior to shipping KS and after. This charge is usually equal to the % money raised after KS fee above.
For my BHAG, I was going to use the standard KS system for my first project as a baseline. After some thought, I realized that I’ve already done that several times, so I decided it was time to try out a 3rd party solution. I had sort of decided on BackerKit – it has the widest name recognition in the circles I run with and it seems to do what I need. But right before I was about to hit “go” they announced that they were raising their “Fee #3 and #4” to 5%. That is as much as KS charges, and while I see the logic of them charging what KS charges as we’ve all built those fees into our businesses as “acceptable”, it just felt high to me. While BackerKit does offer value which they should charge for, I don’t see that value equal to what Kickstarter brings to the table, so why should I pay as much?
So I went looking at options. What became quickly apparent is BackerKit is not the right choice for me. For every fee type, they are the highest or tied for the highest. If fact, they are the ONLY one I found with a set-up fee ($300). And just as importantly, nothing they offered was unique as far as I can tell.
Backer kit charges $300 set-up, 1% of KS money, and 5% of after KS money.
There are new options entering the fray all the time. I looked seriously at 5 systems. I explored their set-up tools, starting campaigns with each, and examined features. One was too limited as it didn’t replace the KS survey. BackerKit got the boot for being too expensive. The other Three I looked at were Celery, ShopStarter, and Fundafull. I had to pick one to use of course, but after looking them over, I can say that all three are excellent choices. They all use Stripe for payments. They all essentially replace the KS survey. They all allow for add-ons and up-sells as well as handling new backers/customers after the KS ends. None charge an up-front fee, and the fees they did charge were all in the same ballpark.
Let’s look at the fee differences…
ShopStarter: No fee on KS raised money, 2.1% on money from add-ons/upsells/other
Celery: No fee on KS raised money, 2% on money from add-ons/upsells/other
Fundafull: 1% on KS raised money, 1% on money from add-ons/upsells/other
Some individual notes. This isn’t meant to include everything, as there are a lot of features in these software packages, these are just some things that stuck out for me.
Shopstarter. Easy to set-up everything. I like how they are set-up to print on a Dyno 450 thermal label printer. This printer is sort of a standard in the business and it doesn’t use ink! It doesn’t print large enough labels for USPS (stamps.com), but for the smaller stuff from my first two campaigns, it would be helpful.
Celery: Big benefit here is that it can take PayPal. That’s kinda huge. They also have widgets that you can add to blogs to sell product. If I was hosting my WordPress blog with another service, this would have been enough for me to choose it I think (you can’t add widgets on wordpress when you host with them – security issues).
Fundafull: This one is different. On one hand the on-line tools are not as slick. They also have a $250 minimum, so if your campaign isn’t $25K, they might not be the right choice (they are willing to work with you on this as they are new and are looking for traction – so it’s worth asking). However, for folks that run multiple campaigns, there is a feature here that I think is super killer. You can do your data entry with excel (or any .csv file). You’ll need to be just a little tech savvy, but there just isn’t a comparison – it is sooooo much easier to enter data this way than any of the other on-line methods. Fundafull feels like “a hard working guy making a great functional tool” while the other ones feel like they are led by brand manager types (this is not a smack down against Brand Manager types – I was one for years).
One feature that ALL of these products shared was surprisingly excellent customer service. They were all quick to get back to me and helpful with questions.
All three of these would be fine choices. I’m going to start with ShopStarter as it seemed the easiest to set-up. If I had just a bit more time or was a bit more tech savvy, I would have picked Fundafull. If my blog was hosted somewhere else, it would have been Celery. Depending on how the year goes, I may try a few different ones out later to compare them in actual use.
Update on Existing Projects
Meeple Playing Cards: Way ahead of schedule production wise – should give me time to ship comfortably. At the printer now.
How to Human: We tested out two different card stocks, made our choice, and then ordered our print run. Again, ahead of schedule!
Miskatonic School for Girls – The Holiday Break Expansion: Campaign is waiting for approval from KS. Hope to have it live this week – even though most of Fun to 11 will be at PAX!
Castle Dice – More Castles! Expansion: All the “people art” is complete, now we’re working on the “castle bits” art.
Zombie Princess – Drawings in process. The designer of this game is external and he leads a very important/hectic life outside of game design, so this one is limited in how fast we can move. A really fun game though that I’m excited to be part of sharing with the world.