NFTS - WHAT'S IN IT FOR BRANDS?
The diverse application areas of NFTs and Web3 technologies in general entice many brands to take the first step into the next evolutionary stage of the Internet. Global brands such as Nike, Adidas, Coca Cola or Gucci are already using NFTs very successfully to increase brand awareness, enhance customer loyalty and ensure sustainable business alignment. But what exactly do the above-mentioned pioneers and their customers benefit from in the Web3 space? We take a look at 4 benefits that can be achieved with the right project design.
1) INCREASE IN BRAND AWARENESS
Web3 technologies - particularly NFTs and the metaverse - continue to provide excellent marketing opportunities for companies. Brands that introduce new technologies often benefit from media attention because they act as thought leaders and capitalize on the hype that accompanies the technology. At this point, however, it is important to emphasize that NFTs are not suitable as marketing stunts under any circumstances.
Non-fungible tokens can increase overall brand awareness by representing products, services or even other customer interfaces in a unique way. If done in a market-driven manner, enthusiasm and interest in the brand can explode. This increases brand visibility and awareness. However, since NFTs are still negatively associated by some, the following points are important for positive public and media perception:
A) THE MOST POWERFUL NFTS ARE FREE
Most companies do not want to use NFTs as a crowdfunding tool, but as innovative support to achieve their business goals. For this reason, we recommend that companies offer their NFTs free of charge and even unlimited, depending on the purpose. In this context, it is essential that the NFTs provide a clear benefit to the end customer.
Benefit means that owning the token gives a customer access to privileges they would otherwise not have access to. Depending on the brand's individual goals, these customer privileges can be things like rewards, access to special experiences and events, voting rights, products, and more.
B) DISTRIBUTE NFTS WITHOUT COMMUNICATING THAT THEY ARE NFTS
In the simplest understanding, NFTs are unique, digital assets that can be used to authenticate authenticity and ownership. Behind them is technology that creates entirely new customer experiences.
NFTs are neither JPEGs, nor an asset class, nor a scam, nor even a fraud. However, NFTs are still interpreted by many as the terms just mentioned. Conversely, this means that there is currently still too much ambiguity regarding the meaning of the NFT term. Therefore, brands urgently need to refrain from marketing NFTs for NFTs' sake.
Customers would much rather hear about the experiences or benefits associated with NFTs anyway. And it is precisely these that need to be marketed.
2) BUILDING HOLISTIC CUSTOMER PROFILES
Knowing and understanding customers is the key to responding to their needs, creating tailored product experiences and improving customer loyalty in the long term. This is nothing new as far as it goes. However, while the traditional way is to collect user data such as demographics and address, Web3 is inherently anonymous. Only a wallet address represents the user. However, the blockchain is transparent and thus it is possible to see in real time which transactions take place under which wallet address - completely privacy compliant. Combining the existing user profile with the associated wallet address enables brands to understand their audience in a completely new way. Because the real magic happens when companies are able to combine data from Web2 and Web3 profiles to generate a holistic customer persona.
This makes it possible for the first time to transparently track which brands are suitable partners based on customer interactions with other Web3 products. Other helpful data from the blockchain includes Web3 experience by wallet age, purchasing power by token balance, activity level by number of transactions, ownership of other NFTs, or even event attendance history by POAPs.
3) EFFICIENT CUSTOMER ACQUISITION AND RETENTION
Acquiring a new customer can cost five times more than retaining an existing customer. Conversely, increasing customer retention by just 5% can increase profits by 25% - 95%.
Web3 technologies allow customers to own part of the brand experience. What exactly does this mean? Brands can use NFTs to create highly engaged communities by encouraging customer actions to upgrade the NFT or membership. This mobilizes existing customers to join the loyalty program and consistently interact with the brand. At the same time, potential customers are more likely to become aware of the brand. Because at the end of the day, tokens are tradable assets, which means brand loyalty can be monetized.
Shopify describes that communities are rising to become key to building trust and brand equity for customers. Customers are reportedly interested in forming deep partnerships with the brands they love. Passive followers can be converted into active customers with the right strategy, increasing customer lifetime value.
In addition, communities are a low-risk environment for testing and iterating new products and an excellent source of real-time feedback. This is because community members enjoy the exclusivity of being able to test products in advance and are more willing to provide serious feedback because of the token reward.
4) OFFERING INNOVATIVE EXPERIENCES
McKinsey estimates that the metaverse will be worth $5 trillion by 2030. Compared to today's $200 billion, where the opportunities of the metaverse have so far primarily benefited the entertainment industry, it can already be guessed that there will be a rapid increase in the coming years. As web3 continues to spread across the global economy, the line between physical and digital experiences will continue to blur in the coming years. For this reason, we see a tremendous opportunity for brands to expand the experience staging through the metaverse. Live events, product launches, and gamification are just a few of the ways companies can innovate through the Metaverse.
One ticket for companies into the Metaverse is NFTs. That's because all assets that can be owned virtually are based on NFTs. Virtual clothing, tickets, access or memberships can be distributed by companies as NFTs to make the customer experience unique and thus increase customer loyalty.
WE ADVISE ON WEB3
Is your business already realizing the full potential of Web3 technologies? As a Web3 and NFT consultancy, we offer a range of services to help companies both modernize brand awareness and increase customer lifetime value.
For a community building software solution, we would like to introduce Berryfy. Berryfy is our Web3 solution that helps companies enable new ways to build communities. We are looking forward to your inquiry and are sure that we can help you with your request.