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A Speaker provides directional sound so that only the person that it is directed towards can hear it.  Think of it like a flashlight, where the beam of light is the sound coming from the speaker, and whoever it is shining on is the only one that can hear the sound.  Akoustic Arts is developing the A Speaker and is running a crowdfunding campaign on Indiegogo that has been fully funded.  So far A Speaker has raised over $168,000 or more than 500% of its flexible goal of $30,000.

A Speaker by Akoustic Arts

There are two interesting aspects to the rewards strategy that A Speaker is using for its crowdfunding campaign.  Firstly, it has limited the number of A Speaker reward levels available to backers.  It is offering a couple of early-bird specials that offer up to 45% off the retail price, so a backer who gets in early can save up to $380.  Secondly it has limited the number of rewards that can be claimed within those rewards levels.  For the Super Early Bird special, the number of rewards (A Speakers) available is only 30 – and all of those have already been claimed.

There is plenty of debate, both positive and negative, about whether you should offer early bird specials.  On the positive side, this strategy definitely provides an incentive for backers to get in early and fund your campaign.  Potentially early birds can create buzz around your product and help you get your project fully funded.  However, you are giving up profits to a group of early adopters who might have funded your crowdfunding campaign anyway.

For an example of why the early bird strategy may not be the best, you have to look no further than Apple.  When Apple launches a new iPhone, it doesn’t offer any at a discounted price to drive demand.  In fact, Apple employs just the opposite strategy.  It lowers its price on existing iPhones only after they have been in the market for a while and a new model is expected in the near future.  This would be considered a cream skimming pricing strategy, where Apple gets the most profits from its iPhones at the beginning of the cycle and then lowers the price later.

People that want to be first and always have the newest gadget are called early adopters.  This group of individuals is not very price sensitive and is normally willing to pay a higher price to be first.  In the Apple example, this group is not only willing to pay more but also willing to wait in line sometimes overnight just to be first.  As you create your reward levels, you should definitely keep the Apple strategy in mind and see if there aren’t alternative ways to incent early birds rather than lowering the price.