NFTs – or non-fungible tokens, to use their formal name – have taken the digital world by storm. Born out of the same blockchain technology that powers cryptocurrencies, NFTs are unique digital assets that typically represent items such as digital artwork. They can be bought and sold, often for considerable sums of money.
In fact, it was reported in January 2022 that a Bored Ape Yacht Club NFT sold for an incredible US$2.85 million.
Many organisations throughout the world are tapping into the NFT trend. In February this year, Collinson partner Salesforce revealed its plan to build an NFT cloud platform where artists can create and sell NFTs.
However, NFTs have other applications beyond selling digital collectables. Brands can even use NFTs to attract and retain customer loyalty. They can do this by offering NFTs as a means of recognising individual customers and building customer communities.
NFTs and personalised recognition of customers
In the specific context of loyalty, an NFT can provide a tokenised recognition of a customer’s status.
Every NFT is authenticated as unique. This creates an enhanced sense of exclusivity, scarcity and, consequently, value. Brands can therefore use NFTs to recognise their customers in a more fine-grained, ultra-personalised way.
An NFT can unlock specific personalised privileges, such as unique benefits within a programme that might otherwise only have one or two tiers of differentiation.
For example, Marriott International, through its Marriott Bonvoy travel programme, recently partnered with digital artists to create three exclusive NFTs for customers to potentially win along with 200,000 Marriott Bonvoy rewards points.
The limited number of these NFTs enhances their perceived value and potentially strengthens customers’ impression of Marriott as an elite organisation in the world of travel.
NFTs can build communities
Businesses can also use NFTs to build a sense of community, enabling individuals to become members of an exclusive club of specific NFT owners.
NFTs incorporate smart contracts, which means they are programmable and can serve as a type of loyalty membership card. In this way, an NFT can provide customers with access to exclusive events, discounts and other benefits awarded only to a select group.
NFTs can promote loyalty in both online and offline worlds
Looking forward, as our online and offline worlds continue to blur together in the emerging metaverse, leading brands are considering how they can recognise and reward customers in both spheres.
While NFTs can be used by businesses to give valuable customers something of value in the online world, they can also be linked directly to a tangible benefit in the offline world.
Last year, for example, cosmetics brand Clinique gave its rewards scheme members an opportunity to win NFTs that, while having value on their own, also unlock access to free Clinique physical products in the future.
NFTs can also be used to authenticate ownership of an offline item. For instance, Nike has created a product called CryptoKicks, which links a physical pair of shoes with an NFT.
As consumers increasingly expect seamless, personalised experiences, brands are searching for new ways to enhance their most valuable customers’ engagements – with the new range of digital tools, such as cryptocurrencies (the concept of digital money); NFTs (the concept of digital property); and the metaverse (the concept of digital spaces) helping them to build compelling experiences that keep customers engaged online to the same extent consumers traditionally invested offline.
For support with enhancing your customer loyalty strategy and deepening your most valuable customers' loyalty, contact Collinson today.
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In previous Collinson articles, we outlined some of the most important steps in transforming your loyalty strategy, including streamlining your customer data to achieve a single customer view and leveraging segmentation tactics to easily identify your most valuable customers. We also looked at how to personalise your interactions with customers, create a seamless loyalty ecosystem, the importance of building trust through your use of personal data, as well as the role of data scientists in securing your customers’ loyalty.