Love them, hate them, or don’t understand them, NFTs are one of today’s hottest topics for marketers. And they are here to stay. A technology that just a year ago seemed unattainable except for the most elitist of investors, today’s NFTs are being used to attract consumers at every level.
Mark Johnson, CEO of Loyalty360, spoke with Nick Casares, Head of Product at PolyientX, to learn more about the emerging technology of NFTs and how brands can best leverage them to foster customer loyalty.
Casares brings with him 15 years of product strategy for software, with a background across a number of verticals including public safety, marketing analytics and commercial real estate. Today, he is Head of Product at PolyientX, a Web3 technology company that helps businesses engage with their customers through the use of NFTs.
As a custom development agency and software platform, PolyientX’s mission is to help brands create, sell and engage with NFTs. Its no-code platform allows brands and creators to integrate Web3-powered rewards on their own website, app or custom branded page.
Making Sense of NFTs
NFTs (non-fungible tokens) are not magic. They are not a figment of a billionaire tech mogul’s fantasy. Most importantly, they are not unattainable. Simply put, an NFT is a digital collectible. What was once an impossibility, with the emergence of blockchain technology, NFTs are a way for people to collect and own a digital item.
When a customer joins a loyalty program, they join with a phone number, through a mobile app or even in-store with a loyalty card number. It lacks a personal touch. There’s nothing that connects the member to their loyalty number – it’s just a number. But adding an NFT to the mix presents a new opportunity to take ownership of an item associated with the brand. Since the customer owns it, they are more personally attached to it.
Says Casares, “An NFT represents a new touch point for brands to create a more personal relationship with its customers. It opens a new door with the consumer for a deeper conversation.”
The primary value of an NFT is determined by several factors, including if the owner purchased it outright, if it was a promotional giveaway or if it was a reward in exchange for participation in the program. For instance, a commemorative NFT does not carry much intrinsic value, but that value has the potential to value. On the other hand, an NFT that unlocks a VIP event has a high value from the start.
There is a secondary value that can be attributed to an NFT in terms of perks and loyalty points. For example, an NFT that is connected to a loyalty program accrues perks and points that be exchanged for rewards, savings and experiences. In a traditional loyalty program, if a member leaves the program, the points and perks are lost. An NFT allows the owner to capture the value for resale, introducing a secondary value for consumers.
Staying Ahead of the Blockchain Learning Curve
As with any new technology, there are many pain points marketers can face when launching NFTs to their customers. The first is on the technology side. Because NFTs are powered by blockchain technology, this requires an entirely new skill set. While there is a growing pool of talent, it is still scarce, and this is a new skill that marketing teams have not yet mastered.
Secondly, Casares explains that NFT culture relies on community engagement. Marketers are now faced with a new learning curve of how to engage this community. The message boards that host NFT communities were originally designed with gamers in mind. Discord and similar servers are uncharted territory for not only many marketers, but their consumers as well. This requires yet another new skill set around building and maintaining a community that marketing teams may not have mastered.
Investing in a good technology partner is the best way for brands to overcome these challenges.
There is a need for unique, personalized content in today’s customer loyalty initiatives, and NFTs can be a way for marketers to incorporate this special kind of personalized incentive both at scale and exclusively.
At the moment, most brands are treating NFTs as a top-tier tool that is being used in very creative ways to engage customers. But Casares predicts they will proliferate in new ways. He says, “I see five years down the road, consumers will have wallets full of NFTs that are going to represent their interests.”
These tokens will be real indicators of the consumer, the brands they shop and their interests, which will be a valuable tool for marketers. As collecting insights and customer data is getting more challenging, more expensive, and carries greater compliance risks, NFTs will be a valuable way for marketers to capture that insight value once they hit scale.
Navigate Web3 with a Technology Partner
Within organizations adopting the use of NFTs, most are brought to the table by a dedicated internal evangelist – someone, typically on the marketing team, who has become interested in NFTs on the side, and wants to drive it forward. In other companies, often the CEO or top-tier leadership will see the opportunity in the new technology and want to be hands-on.
Brands with a personal stake in NFT technology will have a head start, as passion often precedes profit. But how do brands “sell” in an NFT opportunity? Is it a marketable opportunity?
NFTs open a door to a longer customer relationship. While a loyalty program improves customer engagement and retention, an NFT is not a one-and-done perk. It is an augmentation of the existing loyalty program to tap a new segment of customers. At first, what might be a very select group of new customers, as the technology continues to grow and become more widely accepted, so will the customers attracted to it.
For brands interested in incorporating NFTs into their loyalty programs, they need to start with a strategy. Says Casares, “Find a partner you trust who can navigate Web3 strategy.”
Simply launching an NFT will not move the needle for most marketers. They need an understanding of what works, upcoming trends, and how to avoid pitfalls, which really does require the expertise of a learned partner.
“The experience is out there,” says Casares. “Seek guidance from experts and hone-in on your technology partners. Understand what they can bring to the table and how that pairs with your existing resources. Don’t try to do it all yourself.”
Even with a solid tech partner and a general understanding of the technology and community, brands do best to test and burn to understand where there is value and where the opportunity lies. Casares cites the following examples of brands that successfully ran test and burn campaigns with NFTs.
Executive vice president of product and communications at Tiffany & Co. (see above, hands-on top-tier leadership), Alexandre Arnault, wanted to turn his CryptoPunks NFT into a physical form. In this case, it was a rose gold pendant. Immediately, other CryptoPunk community members wanted a physical representation. The two brands partnered to offer a limited-time NFTiff collection of customized CryptoPunk pendants with Tiffany & Co. branding rights. The project sold out in 22 minutes and raised the equivalent of $12.5 million.
But it’s not just specialty retailers with high-end consumers who are successfully testing the strategy. Legacy-brand Bicycle Playing Card recently entered the game with the launch of its Main Collection 8008 NFT which included both an animated card tuck case and an exclusive physical deck. A car wash chain in San Diego used a different approach, targeting its existing customers to use NFTs to unlock benefits and perks for repeat customers.
Heavy-hitter Starbucks may be the most widespread brand to incorporate NFTs into its loyalty play. The Starbucks Odyssey program is being marketed as a Web3 experience where members will collect NFT “stamps” along their coffee journey to unlock rewards in the digital community.
With more and more mainstream brands embracing the technology, Casares says, “I anticipate 2023 is going to be an explosion of these experiments within the loyalty space.”
Technology is Here to Stay
Brands looking to incorporate NFTs into their marketing plan would be ill-advised to just jump on the bandwagon so to speak.
Using NFTs to augment an existing loyalty program is one of the best ways brands can incorporate the technology and add value. Explain to stakeholders how NFTs can be used to engage with customers in a new way and treat the technology as a long-running extension of the program. As the adoption and acceptance of the technology continue to increase, brands with a foot in the door in the early stages will benefit from having that leg up.
PolyientX gives brands the tools they need to launch NFTs into their own loyalty programs. The no-code platform gives marketers the power to create customized rewards experiences for NFT holders using PolyientX’s extensive library of rewards. Plus, brands can integrate the rewards on their own websites or a custom-branded claim page, with the look and feel of a natural extension of the program.
The company simplifies the learning curve and helps brands craft strategies to bring an NFT project to market. Its consulting and development services include NFT minting services, Web3 education and onboarding, and rewards-based engagement strategies.
Simply launching an NFT is no longer a viable way for brands to get involved in Web3 from a marketing standpoint. In the beginning, an NFT launch generated significant revenue, but it became more of an empty promise for collectors who purchased the NFTs without knowing where the brand would take them.
Casares offers this advice. “Brands that want to be savvy with NFTs need to think beyond the sale and think about how NFTs map to their overall engagement strategy, and how to turn it into a long-term win for their customers. We are convinced that this technology is here to stay.”
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