Over the past week Kickstarter updated their Terms of Use, making the layout and language simpler for people to understand. One section they focused on clarifying is the creator/backer relationship.
These changes are coming just after last week’s update of CLANG, a video game launched on Kickstarter by Subutai Corporation. The project successfully raised $526,125 in July 2012, but ran into funding and development problems. They shipped out some rewards and demos to backers, but just posted their first update in a year saying that they were refunding those who weren’t happy with what they received, and announced the termination of the project.
As mentioned before, Kickstarter does not take responsibility for creators who do not deliver on their rewards, and states that it is up to backers to take legal action if they are not satisfied with the result (or lack thereof).
Below are some basic best practices for reward fulfillment to help make sure your project runs smoothly:
1) Only promise what you can give
You should be fully aware of what you are capable of offering to backers and how your product/rewards are going to be manufactured before launch. This includes making sure that your manufacturing plan can handle extra orders in the event that your project becomes a huge hit! Planning things ahead of time can make projects run better and avoid unexpected issues later on.
Another way that this comes into play is limiting options available to backers. You want to be sure that you can make and ship all the rewards on time (to the best of your ability) and offering a ton of different reward and color options can be a headache when it comes to putting it all together at the end.
2) Use surveys
Using surveys is a great way to simplify the ordering process and help give you a more precise idea of what you will need to ship to backers:
“The Survey tool in the creator tools sidebar makes it easy to collect mailing address, shirt size, reward options, or anything else you need to fulfill rewards.” – Kickstarter FAQ
The CrowdCrux post, Kickstarter Mistakes – Calculating Reward Fulfillment, gives some examples of how Kickstarter surveys can come in handy:
“[I]f one of your reward tiers is a t-shirt with your company logo, the size of the t-shirt is a variable that can significantly differ across your backer population. If you need to fulfill 100 t-shirt orders, Kickstarter surveys can help you minimize the risk of overstocking and spending more funds than needed.”
3) Contingency planning
Kickstarter’s new Terms of Use outlines some actions that should be taken if creators run into problems fulfilling their rewards. Along with consistent communication with backers, creators should:
“[W]ork diligently and in good faith to bring the project to the best possible conclusion in a timeframe that’s communicated to backers; … demonstrate that they’ve used funds appropriately and made every reasonable effort to complete the project as promised; … and they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.”
If obstacles arise and you are unable to complete your project as promised, it can be very helpful to already have contingency plans in place. If something comes up with manufacturing, is there another company who can handle its production? If not you may need to be prepared to return funds, or come up with alternative rewards.
Keeping these things in mind ahead of time can help save your image by showing that you are prepared for challenges and have a reasonable, quick response to any issues.
4) Give yourself enough time
Promising fast reward shipment can be a plus. Often projects plan to ship at a convenient time for backers (like gifts just before the holiday). This is a good strategy but it’s important to keep in mind the time it may take to ship everything out and any possible obstacles that might get in the way of those dates.
Generally, it can be better to give yourself a little more time – it’s usually best to finish and send out rewards early than to try to explain to backers why they are late.
General Rule: Under-promise and over-deliver.
5) Communicate all developments
Kickstarter’s reimagined Terms of Use brings up some points about communication for creators who are unable to fulfill their rewards:
“[T]hey post an update that explains what work has been done, how funds were used, and what prevents them from finishing the project as planned … they’ve been honest, and have made no material misrepresentations in their communication to backers.”
Always be prompt, open, and honest about any issues you may have throughout your crowdfunding project. This will be key to maintaining your reputation and avoiding legal action from backers. If you run into any problems backers may be annoyed and it might seem daunting to address your issue to them, but they will appreciate being kept up to date and be more likely to trust that you aren’t just running off with their money.
Conclusion
Kickstarter’s updated Terms of Use applies to projects launched after October 19th, 2014. As mentioned in a Kickstarter Blog post about the changes, most projects run smoothly but these changes are for those that, “don’t go according to plan, and people wind up in the dark about what’s supposed to happen next.” By making these kinds of best practices clear, Kickstarter can help minimize the negative effect of projects that don’t come through, and maintain their reputation and that of crowdfunding in general.
For more on successfully planning your Kickstarter rewards check out my post, 2 Basic Guidelines for Kickstarter Rewards, on Crowd Funding Forum!
Feel Free to Leave any Questions or Comments Below!
About the author
Krystine Therriault is the community manager for CrowdCrux and has helped creators with their crowdfunding projects on KickstarterForum.org. She loves learning about new trending projects and dissecting them to bring new tips and information to creators. You can find her on LinkedIn here or Twitter here.
