Customer expectations are higher than ever and brands must go above and beyond to earn their loyalty and build long-term relationships. This means moving beyond points, cash back and the traditional methods that brands have relied on for so long. When it comes to building experiential benefits and emotional loyalty, how are you going to go about it?
In this brief session, we will review how the integration of web3 technology can take customer engagement to the next level. We’ll highlight the key benefits of Web3, why it’s not as scary or foreign to customers as you might think, and specific use cases and models that your brand can explore.
My name is Jon Parise and I am the Chief Revenue Officer and a co-founder of Gigantik. My background is in marketing, specifically focusing on customer and loyalty marketing for both brands and consulting. My initial interest in NFTs and web 3 was how it could be applied in the marketing world. Over time, my understanding has evolved, as we have worked with different brands and seen what others have done in the marketplace.
Many brands have launched NFT projects in the past 18-24 months, but few have tied the project back to business objectives. At Gigantik, our focus is on how brands can use this technology to attract, build and grow customer relationships.
In order to do this, an understanding of how web 3 works is essential. This technology invites creativity, and today I will briefly cover the core capabilities of web 3, specifically those that are most relevant to marketers. I will explain the differences between current loyalty strategies and the web 3 model, and provide some ideas on how to implement these ideas at your company.
Loyalty marketers are often more analytical than creative. When designing loyalty programs, many marketers start with Excel to crunch numbers and understand customer behavior, rather than starting with a whiteboard to map out a customer experience. This can lead to a focus on math and transactions, rather than emotional connection and feelings with the brand.
The recent changes to the Dunkin Donuts rewards program highlights the trouble that many loyalty programs face. Building customer relationships on the back of transactions can result in negative reactions from customers, as seen in the social media response to the announcement of the more expensive process to earn a free cup of coffee.
You know loyalty is really fickle and what comes to Brands and customers, it needs to be earned and reared over time. When that loyalty centers primarily on a transactional relationship, it becomes harder for the relationship to endure. Rewards programs will have to change over time, and loyalty currencies will have to adapt to market conditions. However, far too many customer experiences are built on transactions and leave customers wanting more.
Many customer experiences with loyalty programs start with giving up personal information such as name, email, and phone number. The rewards are often impersonal and generic. The experience carries over into the core value proposition of most loyalty programs where customers earn points for every dollar spent or receive cash back with every purchase. The rewards are typically locked into one brand and not transferable. Nearly 70% of rewards credit card holders are sitting on unused cash back points or miles that are devalued over time. Brands are not getting the incremental purchase or providing the rewarding experience that creates good feelings towards the brand.
Marketing is another area that brands are exploring, especially around loyalty. Partnerships have huge network effects for brands and can earn a lot of goodwill with customers. However, these partnerships take a lot of time to make happen and there are significant integrations required for the two brands to talk to each other. The goal of marketing should be getting as close to one-to-one as possible, but with loyalty programs today, brands only get a single view into the customer. Brands are limited to what they see only with what the customer does with the brand and do not get a good peak into the customer's other passions.
The web 3 part of the conversation offers a lot of room to evolve in the area of loyalty and marketing. While there are good things that come with the way that loyalty programs work today, the experiences are lacking and there is room for improvement.
The most important thing to remember about NFTs is that they represent ownership of something digital. Before the blockchain, there was no way to prove digital ownership. NFTs are unique and their ownership is verified on the blockchain, meaning it is decentralized and not controlled by one group.
There are three areas that make NFTs a powerful tool for marketers:
From a brand's perspective, considering loyalty, NFTs should be viewed as value. Value in a loyalty program should be a two-way street. In a traditional loyalty program, the model is that you spend with the brand and they give you something in return. However, with NFTs, the value stays with the customer and they can do whatever they want with it.
In web3, loyalty programs are not mutually exclusive with NFTs. Loyalty marketers should view this as a creative exercise and expand their thinking about their brand's loyalty experience. NFTs can build an emotional connection with customers from the start. The creative associated with NFTs can make them unique and commemorate events or dates. As customers collect more NFTs, they can unlock rewards and privileges. The story of their experiences with the brand can be told through NFTs. This is just the beginning, as NFTs can unlock even more benefits as customers continue to participate with the brand.
Interoperability is another aspect to consider. This means that benefits tied to the ownership of an NFT can deliver value outside of the original brand. This opens up co-marketing opportunities where one brand can honor the other brand's NFTs and extend benefits to each other's customers. What's really cool is that little integration is required, making partnerships between brands almost instantly possible without any lengthy or complex integrations. Furthermore, there's no need to share customer data between the two brands. Web 3 promotes partnerships and makes launching them a much more achievable possibility.
Collecting NFTs also allows for a more complete picture of your customer. You can scan the contents of a customer's wallet to get a better understanding of who they are. This opens up a world of opportunity for brands to better know their customers.
We have customers using our platform to launch season tickets as NFTs, building digital collectibles for live events, or integrating NFTs into gaming experiences. There are already many great use cases out there, and we're likely missing even more. As a marketer, this technology invites creativity, so take advantage of this opportunity to flex your creative muscles.
However, any strategy must make sense from a financial standpoint, so it's important to balance creativity with analytics. The best way to prepare for this technology is to design and launch a pilot program. This is a great time to test new ideas and see how customers respond, as opposed to simply jumping on the hype.
Take this opportunity to explore and think about how you want to support customers with NFTs. The best ideas will come from those that enable cool experiences for both brands and customers. If you have any questions or would like to learn more about how our company, Gigantik, can work with your brand, please don't hesitate to reach out.
A simple loyalty framework for web 3 can be created. Web 3 is often complicated, but it's important to remember that it's all about the user experience. Collecting NFTs is not a foreign concept and it should start with NFTs as the anchor of the program and customer engagement strategy. Ownership is what unlocks all experiences and benefits for your customers. NFTs can be called digital collectibles, stamps, passports, stars, or anything that makes sense for your brand. The designs should tie directly back to the brand and make sense to customers.
Utility can be added to the NFTs by offering a unique experience for collecting them. The technology is also advancing with new ways to convert NFTs into passes for Apple or Android wallets, which allows for verification of ownership at a store or live event. This can trigger discounts or special access to areas at live events. Think beyond just your brand and launch partnerships that provide benefits and complement what you're doing.
Collecting can be a lot of fun and motivate behavior. The motivation behind collecting becomes stronger when collecting brings benefits of true digital ownership such as transferability and the ability to sell it.
We have brands within our platform that are using the concept of challenges. For example, collecting a set of NFTs that unlock new, more hard-to-come-by NFTs for collectors. This not only adds to the excitement of collecting, but also increases the value and utility of the experience, making it a powerful motivator for behavior. In fact, one of our customers reported that collecting is driving up retention, as people who start collecting continue to do so, especially when it's a brand they are passionate about.
Loyalty programs, for the most part, only recognize customers and not the wider community. However, with the public information on the blockchain, recognition can occur between customers and with customers at the same time. This not only adds to the value of owning NFTs, but also creates a sense of community and recognition.
The hype cycle for NFTs has passed the peak of inflated expectations and is heading towards the stage of disillusionment. The market for speculative generative art that drove the hype has cooled off, while the market for enduring collectibles is just getting started. Brands that rushed in on the hype are questioning their approach, but it's not about making money off of vanities. The head of blockchain from EY stated that it's about collecting the story of our life and accomplishments and sharing them with the world. Brands should not miss the opportunity to be a part of that story.
While it may feel like there is a slowdown in NFTs, this is actually the perfect time for brands to learn, explore, and prepare for the technology. Some of the best and most innovative brands, such as Starbucks and Nike, are pushing forward with new web 3 customer marketing projects. My advice is for brands to not sit this one out, but to learn, explore, and prepare for the potential of NFTs.
Jon Parise is the cofounder and Chief Revenue Officer at Gigantik.Through technology solutions and strategic consulting, Gigantik helps brands create meaningful web3 engagements that deliver shared value between them and their customers.
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