Surprising research from the University of Hong Kong suggests that crowdfunding campaigns with offbeat numbers as their funding goals perform better than those with round numbers.
You've carefully crafted your crowdfunding campaign. You've planned out your early bird pricing and incentives, shot a compelling video in which you tell your company's story, and recruited your friends and family to make pledges early to give the campaign a successful look. And you've put a lot of thought into selecting a funding goal that you're confident you can reach, yet will give you enough capital to get your new product off the ground.
But have you considered tweaking that amount to make sure that it isn't a round number? A study by researchers at the University of Hong Kong suggests that maybe you should. Researchers Tse-Chun Lin and Vesa Pursiainen and their team reviewed 166,819 Kickstarter campaigns in 2009 to 2017. They focused on campaigns with goal amounts of $13,000 or less to answer a simple question: Does using round numbers decrease your odds of success.
Yes it does, they found. For example, looking at crowdfunding campaigns with goals of $5,000, researchers found that 38 percent of them reached that goal. But those with goals between $4,000 and $4,999, succeeded about 49 percent of the time. And those with goals between $5,001 and $6,000, succeeded about 44 percent of the time.
What's wrong with round numbers?
Why are people more willing to fund campaigns with non-round numbers? For one thing, round numbers represent a form of mental laziness, the researchers point out. After all, campaign goals tend to "cluster" at the $1,000, $5,000, and $10,000 levels. But there's no real reason why they should, other than the human tendency to round out numbers, the "round number heuristic," in research terms. Set your funding goal at $10,000, and prospective funders may assume that's just your guesstimate for roughly how much money you think you may need to get your new product on its feet. Set your goal at $1,103, and they may assume you've done careful research into exactly what your project will cost in order to arrive at that number. As if to confirm that view, the researchers found that seasoned entrepreneurs who've done crowdfunding before are less likely than first-timers to set round-number goals, indicating either that they recognize the negative effect of round numbers or that they've gotten better at calculating project costs.
Though the researchers don't address this, there's another possible reason that crowdfunding campaigns with non-round numbers perform better: Offbeat numbers tend to grab people's attention. I discovered this many years ago when I drove onto a small island off South Carolina where I was visiting an eco-resort. There were speed limit signs made of beach-colored wood and they said things like "Speed Limit 23 miles per hour."
Why 23 miles per hour instead of 20 or 25? I asked the hotel's manager later on. Because the signs were made of local wood to fit into the resort's esthetics, he explained. As such, they were easy to miss, and back when they sported round numbers, many guests drove right by them without noticing. When the signs were changed to unexpected numbers, like magic they became visible.
There's no guarantee that changing your crowdfunding campaign goal to a non-round number will make it successful or even more noticeable. But it's certainly worth doing. It won't hurt your chances of reaching your goal, and it just might help.