THE EFFECT OF REWARD STRATEGIES ON THE SUCCESS OF CROWDFUNDING CAMPAIGNS

Jorge Renato Verschoore ,Mariana De Araújo

doi:10.1590/1678-6971/eramr200139

Jorge Renato Verschoore , Mariana De Araújo

Open Access

https://doi.org/10.1590/1678-6971/eramr200139

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Abstract

ABSTRACT Purpose: The purpose of this paper is to analyze the effect of reward strategies on the success of crowdfunding campaigns. Originality/value: The study contributed to the knowledge of crowdfunding reward strategies. Through a comparative analysis approach, the study demonstrated differences in the effect of tangible, symbolic and collective rewards on the success of crowdfunding campaigns. Design/methodology/approach: The study employs the approach of Qualitative Comparative Analysis (QCA) to analyze the CF campaigns of catarse.me, a Brazilian crowdfunding platform. Findings: Tangible rewards, such as something special and purchase me, have a positive effect on the success of crowdfunding campaigns. Symbolic and collective rewards, such as collectible tokens, pursuit of pleasure, and top it up, cannot replace the material incentives of tangible rewards. The main findings show the opportunities for combinations of reward strategies on collective fundraising. Based on the study, entrepreneurs are able to plan a reward strategy for crowdfunding campaigns. Results are applicable to reward-based crowdfunding and cannot be generalized to other platforms around the world.

Highlights

Collective funding, known as crowdfunding (CF), has been praised as a viable option to raise money for new ventures (Lehner, 2013)
Starting with the reward strategies proposed by Thürridl and Kamleitner (2016), this study addresses the effects of reward strategies on the success of CF campaigns
In order to promote a better understanding of the study, the first section presents the results of the strategies at the rewards level, adding the exploration of the rewards by category and discussing the key strategies and their impact on the success of CF campaigns

Summary

Introduction

Collective funding, known as crowdfunding (CF), has been praised as a viable option to raise money for new ventures (Lehner, 2013). Rewards are a fundamental part of a CF campaign, given that the amounts contributed in support receive a product or service in return (Frydrych et al, 2014). Rewards can help to solve the threshold problem of collective action, in which an individual decision to support a project depends on how many others have made the same choice (Granovetter, 1978; Easley & Kleinberg, 2010). Scholars have shown the positive and negative effect of rewards on collective action (Frey & Jegen, 2001; Bénabou & Tirole, 2006). This debate has brought to light the relevance of reward strategies for the collective action initiatives

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