Across the globe, marketers, and brands face declining returns on ad spend (Roas) as attribution fades, Meta and Google change their advertising policies and data, social media channels suppress organic business posts, and a general aversion to brand loyalty in favor of the cheapest and most convenient. What is a Marketing leader to do?
The answer is simple to stop thinking like a marketer and start thinking like a leader of your consumers/users. We have seen brands have incredible great success with loyalty programs and advocate programs from a traditional marketing perspective. Companies like Sephora, and Starbucks have built their entire brand identities around intimate interactions with their customers and long-term rewards for staying involved with the brand. However, for every success story, there are countless other brands that launched loyalty programs to a lukewarm reception. Simply put it is hard to build a program that encourages repeat purchases/use, natural referrals, and brand champions.
Enter Web3: The ability to build an entire ecosystem with a blockchain-based virtual rewards currency that would hold both real-world values and be redeemable for unique brand rewards.
Let’s follow the path of a major coffee retailer that offers e-commerce, retail, and mobile purchases currently. As of today, their rewards program is a simple dollar to points set up with occasional reward days for specific items. The rewards encourage repeat purchases but do little to grow new customers and often leave customers with little feeling of community.
With a blockchain-based currency, this coffee chain could quickly build its own digital currency which holds a real-world value and a direct purchasing power inside of its business. What seems like a simple rewiring of a loyalty program changes the game as customers now have an incentive to see the currency grow in value, the brand can encourage the saving of tokens for exclusive access, and special drinks are only available to members with over 10,000 tokens, etc. Thus as they spend more and receive tokens and conversely use the tokens for purchases or rewards the brand is providing a direct value impact back to its consumers.
This plays out even further when you enter the space of NFT-based loyalty programs. Now you can create unique memberships that are available for purchase exclusively through your blockchain token. Ie a customer could make enough purchases and do enough activities to gain 100,000 tokens to purchase the Pumpkin Spice Ape that comes with a free coffee 3 times a week, access to all limited edition drinks, invites to events, etc. Suddenly a community is built around this Pumpkin Spice Ape as individuals who previously never used your loyalty program looks to purchase tokens in order to get this limited edition NFT with long term rewards, and thus the value of the tokens rises to your loyal customers giving them even more benefit for using the brand. This plays out even further as the brand can now use the limitless capabilities of the metaverse to create virtual experiences and social interactions inside of the metaverse as it grows in popularity.
Currently, the Web3 space is rich with Web3 projects utilizing this technology and use cases for their brands however all marketers should look to their success and being to prepare for use cases for their own brand to enter the next generation of brand communities and loyalty.