We met with Drew Beechler, CEO and co-founder of Holder to talk about how Web3 is unlocking new avenues for personalization, ownership and real data privacy.
As the cookie dies, customers want, and deserve, more from brands.
Alberto Mera and Nick Casares sat down with Drew Beechler, CEO at Holder, to discuss how Web3 is unlocking new avenues for personalization, ownership and real data privacy. Their convo is a must hear if you want to understand how Web3 is impacting customer relationships and loyalty programs.
Drew has been in the digital marketing space for a decade, working with startups to build and run their marketing team. Last year he started Holder, a Web3 CRM platform that helps brands strengthen customer engagement.
As a marketing veteran and a pioneer of the Web3 digital marketing age, Drew provided valuable insights into customer data and privacy-focused data analysis, transparent analytics, and the impact of more personalized marketing strategies.
What advantages does Web3 offer?
In the loyalty and membership space, Web3 is shaking up how customers are rewarded for their engagement with a brand, We asked Drew what advantages he thought Web3 offered businesses in reshaping their membership models.
Drew: “Every time I think around Web3 in general I go back to its first principles … What are the valuable differentiators around a blockchain?”
Drew said you have to think about what’s most valuable for your customer, and when it comes to blockchain, this means:
- Ownership - Customers gain direct ownership of their assets and data
- Trust - The decentralized nature of blockchain means intermediaries aren’t needed
- Transparency - Blockchain transactions are automated through smart contracts and don’t require third-party verification
- Immutability - Blockchain is a public ledger that’s nearly impossible to alter or falsify
So how does this translate into an improved customer experience in marketing and loyalty? Drew believes that Web3's future lies in personalization.
In practice, this means:
- Enhanced data sharing and rewards: Customers can confidently share their personal information, knowing it will be used to enhance the rewards they receive in loyalty programs.
- Innovative reward possibilities: Blockchain opens a new exciting realm of verifiably unique rewards. This includes both physical items and digital experiences, as well as exciting co-branded ventures.
- New membership models: Brands now have the opportunity to develop innovative membership programs that offer unique value to their customers.
Why is Web3 good for brands?
So how does Web3 create a mutually beneficial relationship between a brand and its customers? What does a brand stand to gain from working Web3 into their marketing strategy? Customer data plays a big part.
Drew says, “Over the last five years or since the advent of GDPR, we’ve kind of seen the death of the cookie.” With Web3, the customer owns more of the “keys” in their digital wallet. So a brand can see every transaction a person has made with that wallet – all of the NFTs and digital currency a customer owns. Drew says it’s “an incredible look at someone's actual purchase behavior, intent, and transaction history.”
And that customer may be completely anonymous. But there’s so much more value in that ability to see: what are they actually interested in? What are they buying?
Brands also benefit from the new types of rewards that can be offered through Web3 membership and loyalty programs. Verifiable digital goods, for example, are digital properties that can have ownership verified by the blockchain. Drew mentions that customers can now engage with a brand that they know has ownership and transparency top of mind.
This opens up exciting opportunities for new types of membership and loyalty models. Drew brings up tickets as an example of a system that’s particularly exciting with Web3.
With tickets, customers purchase a unique barcode or ID in return for some sort of experience or benefit. He mentions there are a lot of exciting parallels between ticket systems and Web3 digital properties. Owning an NFT “ticket” could potentially grant owners a host of unique benefits specific to their interests and earned through conditions established by a brand.
It’s also possible for new reward types to be incorporated into a Web3 loyalty strategy. These new kinds of rewards, such as non-financial rewards, are targeting more specific needs and interests of a brand’s specific audience. Examples of non-financial rewards include:
- Community access
- Special events
- VIP treatment
These rewards help your brand stand out further in the eyes of your customers while being potentially more financially viable for your brand.
Moving to Web3: Customer data privacy and death of the cookie
Drew brings up how difficult it is for brands to access meaningful data. Particularly with new regulations like the GDPR (General Data Protection Regulation of the European Union), which restricts how HTTP cookies can be used to collect customer data.
Alberto asked Drew about the trust between customers and businesses and how Web3 can help improve this trust about how information is gathered.
Drew: “I think the biggest thing with Web3 is that there’s still a lot of data that I’m sharing with a brand when I buy their NFT or connect my wallet to their website, but it is fully transparent. The kind of trust that exists there is a wholly different level because it’s not this kind of black box.
“I’m connecting Wallet ‘A’ and I know everything that’s in this wallet and you’re going to get my entire transaction history on that wallet.”
Drew is emphasizing the direct line between the customer and the brand that’s created with Web3, rather than having to rely on high-level secondary analytics and customer demographics.
Blockchains also provide the ability to prove that an action was taken and what the action was. This information can be shared with customers so that they are assured that their data is being used to benefit them.
Challenges for brands moving into this space
If you’re thinking about experimenting in Web3, there are a few common challenges to expect. Alberto asked Drew to tell us about some of them.
Drew highlighted three challenges that most companies face:
- Data access: How do you ingest all of the data, aggregate it, and make sense of it?
- Communication: How do you connect with customers and create deeper relationships?
- Privacy, governance and the regulatory environment
When it comes to the data, Drew says brands can use an aggregator like Dune or Moralis with a business intel tool on top of it. For the regulatory side, Drew said that’s more of a politics-slash-internal-discussion thing. And to solve for communication, Holder launched a messaging platform where you can actually send messages directly to a fully anonymous wallet address.
Drew expects to see all different types of innovation in Web3 spaces over the coming months. He says that brands will first focus on maintaining connections and engagement through a Web3-inspired program.
Doing Web3 right: Reddit & Starbucks
We’ve written about several big brands that have already incorporated Web3 and NFTs into their loyalty programs before. But the group touched on two key examples of Web3 adoption in this episode: Reddit and Starbucks.
Nick: “About a year ago, Reddit rolled out this program. They created all of these limited edition digital avatars, just interesting artwork... and they sold these as digital collectibles directly through the platform.
“It was a really great user experience. It still is. They're still doing it. You can purchase them in the app. Up until the Reddit program this wasn’t something that was easily done.
Drew expanded on this, saying that this initiative resulted in 15 million holders of Reddit Collectible avatars and over $40 million in primary and secondary sales volume.
Drew also mentioned that what’s interesting is that early on, Reddit users and communities were very anti-Web3 and crypto. But, Reddit turned it around by putting their own spin on Web3 – they made it speak to what the community and brand stands for.
Reddit’s approach to identity in the Web3 era was largely closed and specific to that platform. But, with the emergence of Web3, there’s an opportunity to extract and spread that identity across the Web, tapping into digital identity as a broader concept.
Alberto asked Drew about how companies like Starbucks are using Web3 in their marketing and loyalty programs. Starbucks recently launched Starbucks Odyssey, a Web3 extension of their highly successful loyalty program.
Drew: “Their loyalty program with their stars and on their mobile app has been leading for many years. And they decided to launch a standalone loyalty program called Starbucks Odyssey which, under the hood, is all built on top of blockchain.”
Drew goes on to say that Starbucks views Odyssey more as a gamified experience rather than a blockchain platform. Odyssey involves customers collecting stamps as they make purchases that are, behind the scenes, NFTs. These stamps can be bought, sold, and traded between members for special rewards.
Drew notes that it’s also extremely easy to sign up for and onboard with no knowledge of the blockchain or digital wallets required. Drew says he created an account and was able to sign in with his existing Starbucks loyalty account. This ties his Starbucks preferences and order history with his Starbucks Odyssey Wallet, which allows them to tailor the customer experience to him.
Starbucks has always been at the forefront of itsloyalty program strategy and has an impressive structure for Starbucks Odyssey by allowing customers to have direct ownership of their points in the form of stamps.
Interested in learning more about the benefits of a Web3 loyalty program? Want to understand how to craft a program for your specific audience? You’ll find answers to these questions and more in Step3’s ebook: Reimagining loyalty with Web3.