From customer loyalty programs to proof of ownership, we look at six key ways NFTs can enhance your marketing strategy.
Research by MarketsandMarkets projected the NFT market to grow from $3 billion in 2022 to $13.6 billion by 2027. The firm cites celebrity use of NFTs, evolution in the game industry, and demand for digital artwork as driving factors for this projected growth. The firm argues that entertainment and media are expected to hold the largest market share.
Regardless of your company or brand’s sector, using NFTs in your marketing strategy means you are committed to being innovative and creative in the digital world. On top of the projected growth, NFTs have a lot of online leverage. The term “NFT” has a lot of organic search volume and a completely new audience may be exposed to your brand. As a digital good, NFTs are also easy to create (aka “mint”) with no extensive manufacturing costs. Collections can be generated from pre-determined assets and be seamlessly issued when needed.
In this post, we'll look at how NFTs can bring value to your customers and provide a foundation for customer loyalty.
1. Loyalty and rewards programs
Many companies use loyalty programs to keep their customers engaged with their brand. After all, there should be benefits to being devoted and loyal to a specific brand. The global loyalty and reward market is valued at $7.8 billion with NFTs poised as being the future of such loyalty programs, according to Business Wire.
So how do NFTs function in these programs?
Because NFTs are verifiably unique, they can be individually issued and provide benefits for certain loyalty programs and services tailored to that customer. Where reward systems would previously be generalized and give the same benefits to all customers that reach a certain “tier”, NFTs can enable a far greater degree of nuance in a marketing mix.
Exclusive NFTs are also rare and have a mystique for offering exclusive rewards to top customers.
As an example, movie theater chain AMC partnered with Sony Pictures to promote the release of Spider-Man: No Way Home by offering 86,000 NFTs to select members of the AMC Stubs loyalty program. Holders of these NFTs receive discounts and other benefits that are “airdropped”, or suddenly rewarded, at scheduled intervals. AMC collects a small royalty on the transactions made from trading the exclusive NFTs, making the whole system self-sustaining. AMC has continued to offer NFTs for large theatrical releases.
2. Early access to events
There are many benefits to using NFTs to replace tickets or access codes to events. Here are a few reasons event organizers are making the switch:
- Record-keeping: NFT transactions are recorded on the blockchain to establish a verifiable path of ownership to an individual.
- Reduce scalping: NFT sales can be restricted so large ticket scalping organizations don’t buy tickets en-masse and resell them for a greater value. The upper and lower thresholds for reselling prices can also be restricted.
- Collect royalties: If tickets are resold, your organization can collect a royalty on the transaction.
- Provide additional benefits: Rather than just acting as just a ticket to entry, NFTs can provide exclusive perks before, during, and after the event occurs. Owning a ticket NFT can be the foundation for an entire community!
The music festival Coachella offers unique NFTs that act as festival passes. They also provide unique on-site experiences as well as digital and physical collectibles. These NFTs are periodically dropped with a range of different price points and access tiers to target different demographics of the event’s audience.
3. Customer perks
NFTs with specific benefits or an intrinsic value are called utility NFTs. Owning these NFTs, whether through direct purchase or by reward, will give benefits, privileges, or utility. The technology functions the same as normal NFTs with the main difference being what is included within the NFT. This makes purchasing a utility NFT like purchasing a special digital package that includes more than just a single product to improve the user’s journey in owning an NFT related to your brand.
As an example of a utility NFT, the band Kings of Leon released their eighth album, “When You See Yourself” as an NFT. Purchasing this NFT album had several additional perks, such as digital artwork, a digital download of the music, and a real-life limited edition vinyl of the album. This NFT went on to generate $2 million in sales.
4. Point collection and NFTs
A common way to keep customers engaged with your platform is to reward them for coming back every day or week. This is most easily done with “points” that are given to a customer and can be redeemed for prizes. While these points don’t function as tokens on their own, a certain amount of them may be redeemed for utility NFTs that function within a certain game or provide their own benefits.
A point collection may require a platform to operate, as there will have to be a point “marketplace” where digital goods can be exchanged for points. Because this market strategy essentially means gamifying the customer experience, it should be no surprise that this point system is commonly used within video games.
Alien Worlds is a metaverse game that allows you to save up NFT points and exchange them for NFTs of varying rarity. The game involves trading digital card NFTs that act as Land, Tools, Weapons, and more that are used to upgrade and manage certain alien planets. Points are earned through playing a “mining” minigame that rewards players for investing more time into the game as a whole.
5. Proof of ownership
When an NFT is purchased, that transaction is recorded in a blockchain database that cannot be fraudulently altered or cheated. This makes it a remarkably effective way to establish proof of ownership of digital assets. Science Direct discusses how creative industry entrepreneurs, or CIEs, have been utilizing NFTs because of structural difficulties in the marketplaces that they operate within. NFTs and digital goods that are produced en masse will still have digital records of proof of ownership and property rights.
This proof of ownership can also act as a verification service in order to reduce scams, spoofs, and other protections for owners of digital goods. Entrepreneur Mark Cuban has suggested that any online document could be transferred into NFTs in order to establish a clear proof of identity. This would fundamentally change how we sign contracts, documents, and provide any other sort of electronic signature.
WISeKey provides an NFT platform that acts as a trusted identification service that enables users to authenticate on various other platforms with an NFT.
6. Fun – Just because!
Sometimes a brand may just want to experiment with a new technology or trend to see what sticks. No guarantee of a new audience or profit, but definitely a way to stay relevant online. Sometimes, generating online discussion around a brand is all it takes to expand your company’s reach.
Pringles released an NFT digital flavor called CryptoCrisp. Only 50 of these unique NFTs were minted and were only listed for $2 – the price of a Pringles can. But, bids for a can quickly shot up to as much as $600. Pizza Hut released a line of “1 Byte Flavourites” NFTs that were the price of a single bite of pizza: $0.18. A new slice was released every week to promote a new flavor.