Two weeks ago Knog of Australia placed an innovative handlebar-hugging bicycle bell on Kickstarter. 10,866 backers have so far pledged £285,381 in development funds. Why did a company founded in 2002 place a product on a crowdfunding website more normally used by start-ups? In a word: marketing.
The Oi exceeded its (modest) Kickstarter target in just six hours – success breeds success and Knog has received press coverage in magazines it normally won’t be featured in.
But the brand’s global distributors haven’t all been happy with Knog’s decision. Some have been downright frosty. For CEO and company co-founder Hugo Davison this came as a surprise, especially as Knog is known for its edgy marketing.
“We want to work with our distributors and dealers, and many have been fully supportive of the Kickstarter campaign,” said Davison.
“But others haven’t been quite so welcoming. Some distributors have been concerned there would be a backlash from dealers.”
He added: “We felt that being visible on Kickstarter would be a good indication for distributors on how successful the product would be out in the marketplace. The hope was that a successful Kickstarter would show distributors and dealers that this product will be poplar before they have to place their own orders. Personally, I could only find big ticks, on every level.”
Part of the win-win would be the short-circuiting of the normal product development cycle.
“We usually seed a market with product before a full launch,” said Davison.
“We might give away say 2000 units to distributors and bike shops across the world. Doing it this way shortens the sampling process to dealers by two and a half months.”
He stressed that distributors and dealers could order trade-packs of the bells at very favourable rates via the Kickstarter campaign.
“Launching the Oi on Kickstarter is a brilliant way of generating awareness of the product before it hits the market. It was not an attempt to go consumer direct. As soon as the campaign is finished we won’t be offering pre-sales or anything online – it will be distributor-only."
The viral success of the campaign took Davison aback. He’s now a huge fan of Kickstarter.
“The second day was crazy,” he said. “Notifications were turned on on my phone, and a new one would come up before you had a chance to look at the previous one. Seeing sales in real-time was addictive.”
Quite apart from the success of the direct sales, Davison believes the Kickstarter campaign will make sure the Oi bell becomes a star product for Knog, and its 65 distributors around the world.
“We normally get between 700 and 1500 views for our product videos a month after launching them. In the first eight days the video for the Oi bell has been watched over 100,000 times.
“The interest from consumers will later lead to a pull-through into bike dealers. We saw that as a win-win.
“Before we started the bell project we had spent maybe a year and a half discussing what would make a good product to put on Kickstarter. We were interested in doing something unusual – Kickstarter was always seen as a marketing tool, not just a pure fund-raiser.
“You’ve got to understand that the Kickstarter community adds a lot of benefits. We’ve been paying a lot of attention to the comments from backers, and some of the improvements will make it on to the final product.”
Kickstarter campaigns have a behind-the-scenes statistical package. This can be used to drill down into where sales are coming from, and which websites are referring the most backers.
“From a measurement point of view running a Kickstarter campaign is a very direct way of working out which media result in the most sales,” said Davison.
“When news stories appear on magazine websites we can see exactly how many bells were sold as a result. So, I can see we had 69 sales came as a direct result of the BikeBiz story on day one of the campaign, equating to AUS$2,500. When it then comes to work out where to focus our marketing in the future we now know exactly which magazines work for us. That’s gold.
“The Kickstarter campaign has also enabled us to reach outside of the bike market – the bell has been featured in designer, tech and collectible magazines that we’ve not been in before. We would have never placed a light or a lock on Kickstarter because that’s what we’re known for but the Ois was a new category for us and it deserved an innovative way of getting in front of consumers. This will lead to more sales for distributors and then dealers.”
Davison founded Knog in 2002 along with Mal McKechnie. The company’s Kickstarter campaign has another two weeks to run.