Beyond Art and Crazy Tweets: NFT Rewards Will Revamp Customer-Loyalty Programs
Artists have already found great success using NFTs to connect with fans, so it makes sense for businesses to follow suit.
Recycle a plastic bottle, get a token. Come into an Adidas shop, get a cool sports NFT. What would the world look like if we were rewarded for being good customers beyond coupons and discounts? This past year, musicians found a way to reward their fans for their loyalty by offering them non-fungible tokens (NFTs), which are essentially blockchain records certifying the uniqueness of a specific asset. In a recent example, the band Kings of Leon not only released its album as an NFT, but also granted fans a chance to win one of six golden-ticket NFTs. The tickets offer VIP perks for future concerts, such as lifetime front-row seats. In addition to those, the band offered a number of “open edition” NFTs that come with special artworks.
Should artists find success utilizing NFTs to connect with their fans, it’s not hard to imagine businesses following suit. NFTs could very easily become commonplace as a strategic tool for brands to strengthen relationships with their customers, replacing traditional loyalty-reward programs that are some of the oldest customer-loyalty tricks in the book.
NFTs are reviving lackluster loyalty-reward programs
Loyalty programs are a great idea on paper — a way to reward customers for their loyalty to a brand while giving them a reason to shop beyond the appeal of the products themselves. However, loyalty points have lost their appeal, with 38% of consumers surveyed saying they aren't interested in joining loyalty programs, according to a study by CFI Group and Radial. According to the report, consumers are reluctant to join loyalty programs because they feel the value they offer is not worth the time, money or effort of signing up.
Loyalty programs aren’t going away anytime soon, but they need a revamp in order to be able to offer customers more than just points for future use. NFTs can easily fill in this void, as they offer customers more options than simply using points. Customers can use NFTs in a number of different ways and for different companies, allowing potential collaborations across different industries. They are also a safer option because NFTs use smart contracts on the blockchain as a way to securely execute and trace transactions. As a result, retailers can reduce system-management costs, and the system is more secure and trustworthy.
Keeping customers in the community from gamification to NFTs
Brands understand the importance of customer engagement, and they put effort into interacting with their customers on social-media pages, inviting customers to like their pages and comment on posts. When social platforms like Facebook were just starting out, “liking” a certain brand was less of a way to show support for a brand and more of a way to signal to others brand affiliation. NFTs can solve this problem by offering a way for customers to interact with brands in a new and innovative way.
Companies are strengthening their connection with customers by offering loyalty rewards with the use of gamification. The Starbucks Rewards app, for example, offers its customers free coffee and the chance to skip the line if they complete daily missions. Customers are incentivized to interact with the brand and also feel as if they are part of a community. Gamification in the ecommerce field isn’t a new phenomenon and incorporating NFTs is a natural next step.
Offering NFTs as a form of reward is already becoming common in the sports world, where athletes offer NFTs to their fans as a way of engagement. The gaming world has also embraced NFTs to strengthen the connection with gamers, finding success in its "play-to-earn" approach. Blockchain-gaming startup Spielworks, for example, recently added the option to earn NFTs on its Womplay platform. If customers are willing to complete tasks for free coffee, they will be very likely to find appeal in the new world of NFTs— especially with potential resale value down the road.
Going back to Kings of Leon, it’s evident the band's golden-ticket NFTs are reminiscent of Willy Wonka’s golden tickets — perhaps the original loyalty-reward program. Wonka’s golden tickets gave consumers another reason to buy chocolate while strengthening the Willy Wonka chocolate brand. NFTs as a loyalty reward take the brand-consumer connection a step further, with a safer reward and a more excited consumer.
Entrepreneur Leadership Network Contributor