Cross-posted from my studio blog.

Please note that this is a strategy, not the strategy and it's heavily biased by my own approach to running Kickstarter projects, feedback I got about my reward structures in the past, and based on my personal experience as a backer of other Kickstarter projects. In other words, this is just an approach that seems to work for me.

I'm going to make an assumption that you are not greedily trying to fleece your backers, but that you are entering into a long-term relationship with them in order to a) build a community around your product or brand and b) provide them with real value in exchange for their contributions. I specify this because without that strong foundation, structuring reward tiers risks becoming an exercise in manipulation.

I'm also going to assume that you've done your homework, calculated how much money you actually need, and set an appropriately (as opposed to excessively or inadequately) high goal. Setting a goal is probably worth a post of its own, so for now I'll just say that once you've done your reward planning, revisit your goal to make sure it covers the cost of producing and mailing the minimum number of backer-extras you'll need if you make your goal.

Here's the number one piece of advice I can give you. If you do nothing else that I suggest, do this: KEEP IT SIMPLE.

If you visit the Bhaloidam kickstarter page, you'll see that I have multiple $27 and $45 rewards. This is because we added the ability to gift those rewards, as well as donate them to various charities after launch. It was also a mistake. I had hoped it would make fulfilment easier, but in the long run I don't believe it has. What I should have done is promote the option at the top of the project wall and added a field to the survey allowing people to donate or gift their rewards.

Confusion about multiple rewards at the same tier was the Number One complaint about the project (over and above all other concerns combined). I can only assume that for every 1 complaint, at least 10 other people were also confused and, most likely, 5 of those people ended up not backing me because of it.

You'll also want to avoid having two nearly identical reward tiers where the higher one includes international shipping. Instead, add clear language to the rewards that indicate how much people should add for shipping.

Now let's discuss specifics about reward strategy...

Step One: The 'Primary' Reward Tier

The first reward tier you come up with is the most important. This should be the most straightforward reward to create and you do so by asking yourself a simple question,
"How much would I charge for this at retail?" Once you've got an answer to that question, you add something a little special to sweeten the pot - mark it down a bit, add free shipping (or early access if it's a digital product), toss in an inexpensive freebie (a thank you post card, for example), or give people the opportunity to buy extra stuff if they give you more money than the reward level.

This is the reward level you'll want to drive the majority of your backers toward, so calculate how many backers at this level you'll need to reach your goal. If you don't think you can realistically get enough backers at this level, then seriously reconsider your approach to the entire project. You'll also want to make sure your goal will allow you to fulfill any bonuses you include with this reward tier and adjust it if necessary.

For example: Bhaloidam will retail for $54. Our main reward level was $45 (a $9 discount), included free shipping within the US (on average, a $5 discount), included the option of extra materials or international shipping for every $9 backed over the reward level. We needed 620 backers at this level to reach our goal.

Step Two: The 'Create Temptation' Reward Tier

If your main goal is less than $30, you can skip this step and jump to the next, digital-only, reward (which you can also skip if your product is already digital and your primary reward is under $20).

Once you've established your primary reward tier, you'll want to create the next-lower tier. This should be a slightly lesser value for the money, but still needs to be compelling. The dollar value should be somewhere between 45-60% of the primary reward. This is a reward level for people who are on the fence about the project, but who still want to contribute meaningfully. As your project nears its deadline, you're going to try and provide these backers with a reason to increase their pledge and upgrade their reward to the primary tier.

For Bhaloidam, this was a $27 tier that provides you the full storyplay handbook, but only a quarter of the gameboard and pieces (and no custom dice).

Step Three: The 'Digital Only' Reward Tier

If you product is already digital and your reward from step two is $20 or less, you can skip this reward.

This reward should be 30-50% of the previous reward and should provide a digital-only version of your project. This could be a print-and-play copy of a board or card game, a demo-or-beta-only version of your videogame, or even a video tutorial and design specs for how to create your own version of a manufacturing project.

Step Four: Planning the Higher Reward Tiers

Now we're going to raise the bar and produce the high-level rewards. These should be special limited-quantity rewards that increase in rarity as they increase in value. The contents of these reward levels should be things that will only be available to backers, provide the backers an opportunity to impact the final product in some way, and/or highlight their contribution in a direct and personal way. The value of these rewards should be intangible. Backers at these levels contribute to your project because they really believe in either you or in your project. The more you help these backers feel meaningfully involved, the better off you're going to be (both you as a person, and as someone hoping your Kickstarter project will succeed). These are your advocates, your allies, your prophets. They don't need a ton of physical stuff to contribute at this level, so make sure you're thanking them with personal effort and a share of the spotlight.

Step Five: The 'Good Friends' Reward Tier

This tier should be double your primary reward, include all the content from your primary or temptation reward, plus a special bonus or extra that only this tier of backers will receive - ever. This is the tier for your friends and distant cousins to show their support.

Step Six: The 'They Really Love Me' Reward Tier

Step it up a notch now! This tier should be double the amount of the previous tier and include the contents of the primary or temptation tiers, as well as something that highlights the backers' contribution. This might be a link to their site in the product, a personal appearance within the product, a special thank you in the product, or some significant involvement (name a character, suggest a mission, etc) or reward (props from the game, signed original art, etc).

Step Seven: The 'Okay, Seriously?' Reward Tier

This tier should be 1.5 to 2 times higher than the previous tier. It should include the content of your primary or temptation tiers and a slightly bigger/flashier version of the previous tier's bonus. This tier is primarily there to make the previous step look affordable and provide an upgrade path as you approach your deadline and backers get excited enough to start increasing their pledges.

Step Eight: The 'Shoot for the Moon' Reward Tier

What is the absolutely largest amount of money you'd honestly be comfortable receiving from a single person for your project (considering the economic bracket of your audience, friends, and family)? That's the dollar amount for this tier. It should include the content of your primary or temptation tier and include a not-insubstantial amount of work on your part to make the backers at this level feel really special.

Step Nine: Revisit Your Goal!

I cannot stress this enough. Make sure your goal includes the cost of the base project, all the production and mailing needed, and 15% (just to be safe) for Kickstarter/Amazon.  If you're careful and plan well, this approach should leave you plenty of headroom to start adding extras to at least your primary tier and above when you start including stretch goals.

And there it is - my strategy for building out the initial Kickstarter rewards for future project. Again, this is primarily based on the success of Addicube and Bhaloidam, as well as observing what reward structures compel me to back other projects at higher levels.