NFTs, or non-fungible tokens, have been on fire for the past year. From the Bored Ape Yacht Club to CryptoKitties, the trendiest collections have been snapped up by collectors to add to their portfolios. Because the authenticity and rarity of the artwork is verified—and traceable—on the blockchain, NFTs are a unique asset with value to the owner.
Most of the attention has been focused on NFTs as collectibles; however, the future isn't in collecting such one-of-a-kind assets. The durable value of NFTs lies in the opportunity they provide for brands to engage with their customers—to create a community of passionate users who can advocate for the brand.
And that's what younger consumers want: When a customer experience doesn't live up to its promise, 70% of Gen Z customers say they have switched brands as a result. And 42% of Gen Z customers would stop purchasing a product if they didn't feel connected to the brand.
They want a product experience with brands that share their values. Building an engaged community is at the core of connecting with customers in the new Web3 reality.
From Barbie to Burberry and McDonalds to Marriott, various brands have launched NFT marketing projects over the past year. However, most of those initial experiments have been focused on building buzz and creating collectibles. In fact, the standard playbook for brands is to commission artwork from Millennial or Gen Z artists, and then drive press around NFT efforts through media outreach.
For example, Mattel brand Barbie created new digital outfits in collaboration with a French fashion house and minted them as NFTs for collectors to purchase. Hotel chain Marriott, for its part, engaged emerging artists to create travel-inspired art for its NFTs and launched the tokens at a Miami art show.
But such "one-and-done" efforts around NFTs as collectibles don't fully capture the value that the tokens can provide in brand marketing efforts. At their core, NFTs can rally a group of engaged customers and transform them into passionate advocates for your brand.
The key to achieving longer-lasting customer engagement is to extend your NFT project so that it creates a community of users. Once you've built that community, you can create an ongoing brand conversation by providing members with a variety of special perks: exclusive content, special events, merchandise, early-access products, and more.
As you're creating your brand's NFT strategy, consider the following three ways that you can build community.
1. Social Impact
Millennials and Gen Z want brand experiences that align with their values. When paired with a social impact purpose, NFTs can both raise awareness and funds for the cause your brand is supporting.
Consider commissioning artwork by an artist tied to the cause. Or, programmatically deliver a portion of the proceeds to a nonprofit by coding it in the smart contract that underlies your NFT.
2. Events
Beyond giving attendees a one-of-a-kind memento of your event, NFTs can help you extend the conversation into digital communities by giving access only to NFT holders. You can even reinvent your event ticketing with traceable tickets that are authenticated on the blockchain.
Also, you can deliver extended content and privileges to users who hold different tiers of NFTs—like a virtual meet-and-greet with NFT holders and featured celebrities of your event.
3. Loyalty Programs
Reimagine your loyalty program with NFTs that provide programmable value to your customers.
Using NFTs, you can deliver additional perks and benefits such as members-only digital content, exclusive popup sales, or inside peeks at new products to customers and influencers who will advocate for your brand.
And when you produce a limited number of NFTs, your loyalty program becomes an exclusive perk everyone will want access to.
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Of course, such examples are only a glimpse of possible NFT brand engagement use cases. Blockchain tokens can reinvent your community and customer engagement strategy in commerce, product authentication, physical product redemption, and more.
And though NFTs have had a strong debut as one-of-a-kind collectibles, forward-thinking brands will organize around how they can take advantage of the new class of technology to mobilize their customers and engage their communities in ways that resonate with tech-savvy Millennials and Gen Z.
