By Billy Loizou, VP go to market APAC, Cheetah Digital
The proliferation of Non-Fungible Tokens or NFTs are generating hot debate, but also confusion. We’re seeing people spending hundreds of thousands of dollars on a digital piece of art, and brands like Dolce & Gabbana, Reebok and Gucci making headlines with their NFT investments.
Which begs the question, how do NFTs help drive brand engagement and customer retention?
NFTs: The new driver of loyalty?
The movement of NFTs is essentially a digital contract of sorts. It could be art, or it could be something like a specialty Starbucks cup. Say the brand releases 100 NFT badges of specially designed coffee cups, and the people who are a part of its loyalty program can buy those NFTs, becoming privy to certain benefits like a lifetime supply of free coffee.
This is where NFTs become a smart contract between the consumer and brand. It’s something a brand can add to at any time, and even more, it has this added appeal of exclusivity. It makes people feel like they’re part of a special community.
Recently at the Australian Open (AO), Tennis Australia released almost 7,000 3D NFT tennis balls that could be purchased with digital cryptocurrency at a rate of 0.067 ETH, or the equivalent of AU$310. Each tennis ball was bespoke and featured its own metadata that was linked to a small 19cm X 19cm plot of tennis court surface.
If the winning shot from any of the 400-plus AO matches landed on the plot, the NFT metadata updated in real-time to highlight the match information while providing the ball’s owner with rewards, ranging from limited-edition wearables to metaverse event access or future benefits.
Basically, at any given time, anyone who bought one of those tennis balls can gain access to things they don’t even know about yet. Tennis Australia could turn around tomorrow and give them a signed tennis racket from their favourite tennis player. There are no rules. NFTs are simply a contract between the consumer and the brand.
It’s diverse, and it’s complicated. But it’s also up to the most creative minds to figure out who to use this technology to drive brand loyalty. I think we’re going to see quite a few brands start taking advantage of NFTs. And I believe that in order to escape the hype around NFTs, it will take assigning them a lifetime value, giving them a form of utility.
Brands need to consider what they will unlock for the consumer. They need to think about what kind of rewards they can tie to NFTs to get people to not only buy them but buy into the idea of them and adopt this new style of loyalty. There’s a lot of opportunity to capitalise on here.
Connecting with customers in a cookie-less era
As marketers, our day job of staying on top of execution is challenging enough. Now we have to do that plus stay on top of data and regulation, challenges and privacy. It’s a lot. And marketers are left wondering how to connect with customers in a cookie-less era.
Marketers love cookies. Brands have been using them for years to track website visitors, improve the user experience and collect data to efficiently target the right ads to the right audiences. Cookies also help to figure out where customers are looking online when they’re not on our websites.
But as we’ve all seen, the death of the third-party cookie is upon us with Google announcing its eradication in 2023. Google is changing its privacy laws. Apple is too.
So, if third-party advertising is driving the most attribution to your marketing efforts, you have to find a new way to connect with the end consumer. And that’s where loyalty comes in – perhaps the most important tool for marketers in this new era of privacy.
Loyalty is key to driving that connection. If you can package up a great value proposition, whether it be a membership, subscription or punchcard program, customers will give you their information. Like Paula says, “Loyalty has to be increasingly respected and invested in to compensate for the loss of third-party cookies.”
In fact, our 2022 Digital Consumer Trends Index revealed that 50% of consumers in Australia are comfortable sharing data about themselves for better service. And 52% are willing to trade personal and preference data to feel part of a brand’s community.
Back to the future of marketing
With all these new privacy changes, it’s time for marketers to get back to the basics of marketing. Build a value proposition, find a reason for people to engage, and then acquire them. Create your own customer database that you can gain insights from. It’s Marketing 101. But it’s almost so simple and so basic, that we lose sight of the fundamentals.
It used to be that loyalty was an afterthought. Marketers would be talking about trialling virtual reality, launching NFTs, doing great TV campaigns with a big actor starring in them, etc. Now, loyalty is going to have to be at the forefront because it’s one of the biggest things that will help position your company for the future.
I think this new era of privacy and the demise of the cookie is great. Personally, I’m happy to see it. It’s getting people thinking; they’re coming up with a better way. I mean, when our clients choose our solution, we build the creativity, the proposition and launch. A lot of thought goes into it. And every department in the business has to buy into it.
You have to commercialise it and activate it. It takes a while, but if you start your loyalty program now, it’s still not too late.