NFT Rewards to revamp customer loyalty programs

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Recycle a plastic bottle, get a token. Walk into an Adidas store, get a cool sports NFT. What would the world look like if we were rewarded for being good customers beyond coupons and discounts? Last year, musicians found a way to reward their fans for their loyalty by gifting them non-fungible tokens (NFTs), which are essentially blockchain records certifying the uniqueness of a specific asset. In a recent example, the group Kings of Leon not only released his album as an NFT, but also gave fans a chance to win one of six golden ticket NFTs. Tickets provide VIP benefits for future concerts, such as lifetime front row seats. In addition to these, the band offered a number of “open edition” NFTs that came with special artwork.

If artists are successful in using NFTs to connect with their fans, it’s not hard to imagine companies following suit. NFTs could very easily become commonplace as a strategic tool for brands to strengthen relationships with their customers, replacing traditional loyalty programs that are some of the oldest customer retention tricks.

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NFTs revive lackluster loyalty programs

Loyalty programs are a great idea on paper — a way to reward customers for brand loyalty while giving them a reason to shop beyond the appeal of the products themselves. However, loyalty points have lost their appeal, 38% of consumers surveyed say they are not interested in loyalty programs, according to a study by the CFI group and Radial. According to the report, consumers are hesitant to join loyalty programs because they believe the value they offer isn’t worth the time, money or effort it takes to sign up.

Loyalty programs aren’t going away anytime soon, but they need an overhaul so they can offer customers more than just points for future use. NFTs can easily fill this void, as they give customers more options than just using points. Customers can use NFTs in different ways and for different businesses, allowing for potential collaborations across different industries. They are also a more secure option because NFTs use smart contracts on the blockchain as a way to securely execute and track transactions. As a result, retailers can reduce system management costs, and the system is safer and more reliable.

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Keeping customers in the community from gamification to NFTs

Brands understand the importance of customer engagement and they strive to engage with their customers on social media pages, inviting customers to like their pages and comment on posts. When social platforms like Facebook were just getting started, “liking” a certain brand was less a way to show support for a brand and more a way to signal brand affiliation to others. NFTs can solve this problem by giving customers a way to interact with brands in a new and innovative way.

Businesses are strengthening their bond with customers by offering loyalty rewards through the use of gamification. the Starbucks Rewards app, for example, offers its customers free coffee and the chance to skip the lines if they complete daily missions. Customers are encouraged to interact with the brand and also feel part of a community. Gamification in e-commerce is not a new phenomenon and the integration of NFTs is a natural next step.

Offering NFTs as a form of reward has already become commonplace in the world of sports, where athletes offer NFTs to their fans as a means of engagement. The gaming world has also embraced NFTs to strengthen connection with gamers, finding success in its “play-to-earn” approach. Gaming blockchain startup Spielworks, for example, recently added the option to earn NFTs on its Womplay platform. If customers are willing to complete tasks for free coffee, they’re very likely to find appeal in the new world of NFTs, especially with potential resale value down the road.

Going back to Kings of Leon, it’s obvious that the band’s NFT Gold Tickets are reminiscent of Willy Wonka’s Gold Tickets – perhaps the original loyalty reward program. Wonka’s golden tickets gave consumers another reason to buy chocolate while strengthening the Willy Wonka chocolate brand. NFTs as a loyalty reward take the brand-consumer connection one step further, with a more secure reward and a more excited consumer.

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Joseph P. Harris