Loyalty programmes are crucial for customer retention and engagement, but with the advent of Web3, there is an opportunity to revolutionize them using NFTs.
NFTs, or non-fungible tokens, offer exclusive rewards, increased engagement, transparency, personalization, and interoperability, all key reasons why big brands are eager to onboard them into their own products.
What Are NFTs?
NFTs, or Non-Fungible Tokens, are a type of digital asset that represent ownership of a unique item or piece of content using blockchain technology. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs are indivisible. This means each has its own distinct value and characteristics.
NFTs have gained popularity in the art and collectibles world, allowing creators to tokenize their work and sell it directly to buyers and cut out third parties that charge a commission.
While still a new industry, the tokens have spread like wildfire across multiple digital sectors.
How Can NFTs Be Used in Loyalty Programmes?
The two concepts of NFT and loyalty programmes link well if we think in terms of giveaways. Brands have been using their token-based reward systems for some time now, rewarding loyal customers and promoting new products by giving NFTs to them.
This works well within the traditional framework of a loyalty programmes. For decades, companies have rewarded regular customers with perks. A golf club might give members a free round after a year of regular use, for example. Or to use a more modern version, an online casino might reward a no deposit casino bonus to members of ‘platinum programme’.
NFTs, then, are simply the Web3 equivalents to these. By integrating NFTs, brands can now offer unique digital rewards, limited-edition products, personalized content, and virtual experiences.
These digital collectibles create exclusivity and prestige among customers: NFTs can be traded and have potential resale value, providing customers with additional benefits beyond the initial reward.
Examples of Big Brand NFT Programmes
Starbucks is a world-famous coffee brand that has embraced NFTs to enhance its loyalty program. Through Starbucks Odyssey, customers can participate in interactive activities called “Journeys” and earn NFTs as incentives.
The NFTs operate as digital stamps which users can collect, trade, and enjoy unique benefits and experiences with. The first paid collection sold out in just 18 minutes, underlining just how powerful the combination of an international brand and NFTs can be.
Scotch & Soda’s Club Soda 3.0
Dutch fashion brand Scotch & Soda introduced Club Soda 3.0, a loyalty programmes powered by Web3 and NFTs, to its customers in one standout ad campaign.
By using these NFTs, members could earn exclusive experiences, events, and offers from the brand. The tokens are minted on the Polygon blockchain and provide members with access to the Web3 community through their public cryptocurrency wallet addresses.
This initiative not only rewarded customers but also fostered a sense of community and inclusivity within the digital world. To date, it remains one of the most successful ventures of its kind.
Soapy Joe’s Car Wash
The San Diego-based car cleaning company, Soapy Joe’s, came up with a unique take when they launched an NFT campaign to boost customer loyalty.
Customers could collect Ethereum-based NFTs from Soapy Joe’s 17 locations, unlocking rewards such as physical merchandise and even amusement park tickets as they accumulate more NFTs. The campaign sparked excitement among customers, with over 10,000 NFTs minted from approximately 2,000 wallets.
Soapy Joe’s successful implementation of NFTs has not only boosted customer engagement but also attracted more visitors to their multiple locations. The NFTs, inspired by their beloved air fresheners, have created a cult-like appeal, fostering a strong sense of community and loyalty among the dedicated “Soapy Squad.”
The Future of NFTs in Brand Loyalty
NFTs have emerged as a powerful tool for enhancing brand loyalty programmes, but there’s a feeling in the industry that this is just the start.
Looking ahead, brand loyalty programmes are likely to become increasingly intertwined with NFTs and Web3 technology. This may involve more personalized and tailored experiences based on customer preferences and behaviors, while interoperability between brands could enable customers to use loyalty tokens across various businesses and expanding the scope of rewards.
Advancements in augmented reality and virtual reality could also offer immersive loyalty experiences through NFTs.
As businesses continue to explore and harness the potential of NFT-based loyalty programmes, a paradigm shift in customer engagement and brand-consumer relationships is on the cards. We may not be far off whole virtual worlds, as part of the all-reaching metaverse, being central to brands’ strategies, making products not just a useful thing to have, but a way of life.
The ethics of this are, of course, questionable, but there’s one thing we do know: the business world is going to look completely different to what it did just a few short years ago.