As Nalin was standing in line for a coffee one day, someone asked her the following question: "Is it easier to raise crowdfunding money/funds for a product with a high price point or a low price point?" It was such a good question that she has dedicated an entire episode to answering it.
In this podcast, we will answer that question by going in-depth on the importance of defining your main unit number and educating your potential backers. We will also discuss both the benefits and potential weaknesses of both pricing methods.
Keep scrolling for a further breakdown of the podcast and helpful links.
[0:39]: The Big Question
Is it easier to raise money for a product with a high price point or a low price point? Which one is better or does better on crowdfunding?
[1:39]: The Importance Behind the Number
The amount of money you raise during crowdfunding is made up of two things: the first is the number of units actually sold. To find out the price at which you should set your product you must think about the number of products you want to produce.
[2:22]: The Initial Difference Between a Low Price Point and a High Price Point
This main difference between a low or high price point boils down to the number of units that you are going to need to produce. A higher price point means fewer backers. A lower price point means many backers.
[3:05]: Importance of Building your Community
You can set your price at whatever you want, but you must take into consideration how many people are going to need to back you at that particular price point. It is of the utmost importance to calculate how many backers you are going to need and start building that community.
[3:21]: Example of a Low Price Point
With a goal of $100,000 at $10 per unit - you will need 10,000 backers.
[4:17]: Example of a High Price Point
With a goal of $100,000 at $500 per unit - you will need 200 backers.
[4:50]: Comparing the Two Pricing Options
Low price product means spending more time and effort to get people into your community (because you need a lot more of them). However, they may convert quicker because the cost doesn't set them back too much. Whereas, high price product means you don't have to get as many backers but you may have to work harder because that initial investment is pretty substantial.
No matter what price point you're at - you need to show the value of your product and clearly explain why people should want to back you.
[7:42]: Importance of Educating Your Audience
The second thing that affects the amount of money you raise on crowdfunding is educating your audience and building that community. This plays a part in explaining the value your product can have on people's lives and is crucial in getting their money to back you.
[8:03]: The Answer to the Question
I'd tell you but then where's the fun in that?! Listen to the podcast and find out!
Visit the Crush Crowdfunding Website: https://crushcrowdfunding.com/
Connect with Nalin: https://crushcrowdfunding.com/contact/