NFT application areas and added values
NFTs have become the talk of the town and already made their way into the corporate world. But what are the actual areas of application for your customers and what added value do NFTs offer your company? In the following article, we would like to provide you with information on this.
Definition and technical basics of NFT
Before we get into the application areas and added values, we should explain the basics. The abbreviation NFT is made up of the words Non-Fungible Token. Non Fungible means "non-exchangeable". This means that each NFT is unique due to different values and therefore cannot be replaced 1:1 by another. A Fungible Token like the Bitcoin, on the other hand, can be exchanged for another Bitcoin at any time without creating a difference in value. However, this does not at all mean that NFTs cannot be traded. Both NFTs and Bitcoins are digital assets, they just serve different purposes.
Technically, an NFT consists of two files. The one that is in the foreground and visible to the user can be an image, video or audio file. The file that is in the background is a smart contract in the form of a JSON file. In simple terms, it is a programming code that is stored on the blockchain, transmits information and automatically executes predefined commands when certain events occur. The information it contains provides information about the creator, owner, and the entire transaction history of the NFT. It can be viewed transparently by all people and is immutable. Due to the blockchain technology, an NFT is tamper-proof and therefore cannot be copied by a screenshot, or a screen recording.
Areas of application for customers
Many people associate NFTs with digital art, as many of the NFT projects are still oriented towards digital art or digital collectibles. However, this is only one application area among many. We are convinced that this will shift in favor of other use cases in the coming months. After all, the following use cases offer great potential for companies from a wide range of industries to usefully improve the unique selling proposition of their products or their services through NFTs. That said, we'll start the list with the NFT as a collectible, but show how you can use it as a business in a meaningful way.
Using the NFT as a collectible from a business perspective
From Panini stickers to Pokémon to baseball cards, many people like to collect things. With the help of NFTs, trading cards and collectibles can now be digitalized. The collectible makes sense from a business point of view if the customer receives an NFT as a result of a product purchase and, for example, receives special benefits from the company by collecting several NFTs from a collection. In addition, collectibles are often associated with emotional value. You as a brand enable your customers, in an innovative way, to become followers or even fans of your products.
Give customers access through NFTs
An NFT can be used to give customers exclusive access to a product, service, event, or membership area. In this case, the NFT works like a ticket or login key. The uniqueness and tamper-proof nature of the NFT protects against misuse. It doesn't matter whether this happens in the real or digital world. Digital products and services are here to stay. Innovations like the Metaverse will also lead to more digital events in the future.
The establishment of incentive programs with the help of NFTs
Incentives will be easier to implement in the future in innovative ways thanks to NFT technology. The NFT is used at the physical point of sale or online store and offers discounts or other special promotions to the customer. The customer verifies himself online or in the retail store as an NFT owner of the company and can be automatically rewarded with every transaction in the future.
The NFT as a digital certificate of ownership
As a digital certificate, the NFT can provide unique information about the rightful owner of an asset. The NFT can be linked not only to digital items, but also to physical items such as limited edition watches, cars, or sneakers. This can counter both the black market and the production of fakes.
The NFT as a funding instrument
The use of an NFT as a funding instrument is more common among start-ups, artists, musicians or film producers. The goal is to fund a business or project idea by selling NFTs. People who believe in the idea or are already fans become investors through the purchase and can benefit financially, for example, if the project is successfully implemented. Often dividends are distributed to NFT holders, but resale can also be profitable if demand increases
Creating new investment opportunities through tokenization
As mentioned earlier, both physical and digital assets can be linked to an NFT. The number of NFTs is optional, which means that an asset worth €10,000, for example, can be divided into 100 NFTs and sold at €100 each. Both the company and the buyers can benefit from a percentage increase in value. The so-called tokenization of an asset allows a large number of people to invest in different asset classes and diversify their investments.
The added values for companies
The individual application areas can of course also be combined or built on top of each other within an NFT project. Depending on the application area and strategy, important corporate goals can be pursued and achieved. Regardless of the industry, company size, target group, product or service, NFTs offer significant added value. The following section discusses how companies can benefit from an NFT project.
A successfully executed NFT project can retain customers to a company. If you design the project's roadmap for the long term, customers can continuously benefit from and use an NFT by making a one-time or recurring purchase of a product or service. This will result in them remaining loyal to your company, and your brand will always be present.
Attract new customers to the company
A well-designed NFT concept can also lead to new customers becoming aware of your company and your offering. By linking or expanding your offering with an NFT in a meaningful way, there is an opportunity to make your product or service more attractive to the existing target group or to reach a new target group.
Market a product or service through an NFT
An NFT can support both the marketing of existing offerings and the introduction of new products or services. The focus of the communication should be on the added values generated by the combination of value proposition and NFT technology.
Taking communication with the target group to a new level
In terms of communication, new ways can be implemented that can turn your target audience into a community and raise the identification potential of your brand to a new level. By setting up exclusive forums and events for the owners of the NFTs, you can address your target group in a more targeted way. Here, there is also the possibility of involvement in business decisions as well as receiving opinions regarding your offering.
Market positioning as an innovative and customer-friendly company
An NFT project not only offers benefits to your company, but more importantly to your customers. This can lead to your company being perceived as customer-friendly. When implementing an NFT project, your company takes a new, technical approach and also positions itself as innovative. In conclusion, the right choice of blockchain also puts the spotlight on sustainability, as there are definitely environmentally friendly solutions available.
NFTs as an extension of existing or development of new revenue streams
The NFT can serve as a means to increase revenue due to the added customer value, provided it is strategically integrated into the business model along your business objectives. It can also be used to develop new revenue streams. In the short term, this can come up mainly through the trade of the NFT or cooperations with other NFT projects. In the medium and long term, completely new business models or business model extensions can also be realized through the revolutionary technology.
Perspectives and opportunities
NFTs are here to stay. Based on the added values and application areas, we are convinced that the right NFT strategy will be at least as important for companies in the future as the social media strategy. The opportunity to be one of the first movers in this area and to establish oneself in the market is now uniquely there and the chances of success are very high. However, before implementing an NFT project, a well-thought-out concept that is optimally aligned with your company's goals as well as its target group is essential for success. Since the topic is still very new, we recommend a discovery workshop in advance, which on the one hand imparts knowledge in the area of NFT, Metaverse, Blockchain and Web3 and on the other hand outlines a first project idea in a joint session. You are welcome to use the contact form below to arrange an initial, non-binding consultation with us. We look forward to your inquiry!