During recent years, NFTs (Non-Fungible Tokens) stepped out of the niche of being just another digital art collectible and transformed into the potent weapon of the brand. Previously, NFTs were the domain of artists and other crypto enthusiasts, but now its application has expanded to include leading companies creating one-of-a-kind digital experiences, leveraging customer engagement, and building brand loyalty. This evolution is a new frontline in digital marketing and brand strategy.
In this blog, we examine the ways in which NFTs can work wonders when used as a marketing tool and why marketers should leverage NFT technology now.
A closer look at What are NFTs and how do they work
NFTs or Non-Fungible tokens are special digital records on a blockchain. Unlike regular cryptocurrencies like Bitcoin or Ethereum, every NFT is unique and it is not clear how users want to exchange it with other types of NFT. Most frequently they are linked with digital art, virtual goods, and collectible articles, though there is much more to these things.
The main characteristics of NFTs are the following ones:
Blockchain verification of authenticity and ownership
Smart contracts that are immutable and able to act (e.g., in case of royalty claims)
The capability of representing physical and digital assets
What Brands Are Doing With NFTs Besides Collectibles
Forward-thinking enterprises are utilizing NFTs to improve clients experiences, form communities and generate revenue in new methods. Here’s how:
- Rewards and Loyalty Programs Loyalty programs are one of the strongest NFT based applications when it comes to engaging with customers. Brands can provide exclusive rewards in the form of NFTs that also carry with them benefits, such as: VIP rights Discounts Fast releases of products
Another example is the case of Starbucks that offers Web3 loyalty NFTs through the company program called Odyssey which introduces a gamified experience to the loyalty system so that the customers can trade and earn digital badges.
- Exclusive Community Membership Brands are able to create NFTs in the form of a digital membership card. With these NFTs, it is possible to provide holders with exclusive access to:
Events
Private sales
Online communities
It is a good strategy to reinforce the brand loyalty that evokes a sense of belonging and exclusivity. A prominent example is the Nike .Swoosh online site where online purchases in the guise of digital goods have advantages that extend into the real world.
- Digital Merchandise There is also a growing role of virtual goods and wearables in the metaverse. Gucci, Adidas, and Coca-Cola are some brands that already have branded NFTs in the virtual world and can present them to others showing off what they have in the real world: identity and status.
The digital assets are collectible and functional, allowing a whole new way of fans demonstrating brand affinity.
- Token-Gated Commerce The token -gated e-commerce allows the brands to provide exclusive offers to NFT holders. Shopify has already provided this option and it is allowing brands to customize their NFT experiences in their online shops in a more easy manner.
The model is capable of driving up the conversion rates as it speaks to the most invested customers of brands.
- User-generated Content and Co-Creation NFTs can be used by brands to promote user-generated content and even work on co-created products. With NFTs and creative licenses, brands empower fans to enable remixing, reuse, and resell of branded content.
Not only does this create a decentralized brand community, this also creates an additional channel of user based marketing.
How NFT can be use in Brand Strategy
Real-ness and Open Honesty
NFTs are stored on a blockchain and can be used to prove authenticity since they also give a record of ownership that can be verified. It is especially helpful when it comes to luxury brands or limited editions.
Increased brand loyalty
NFTs allow brands to create a long-time relationship with their clients where they will be able to earn them a digital asset that will gain value over time or grant them access to future benefits.
New Sources of Revenue
Through the minting and sale of NFTs, brands can access additional revenue streams that are digital-first. Also, royalty will enable brands to gain secondary sales.
Future proof marketing
When applied to your strategy, integrating NFTs will put your brand in a position to succeed in the decentralized web (Web3). The first movers into this space also have an advantage.
What Brand Should Do When Entering the NFT Space
Educate your audience- We still have not seen full comprehension of NFTs in the minds of consumers. The best way to bring them on board is through tutorials, guides, and explainers.
Be less about hype and more about utility – Move past the collectible element. Make your NFTs meaningful.
Facilitate an exceptional UX lossless - Eliminate technical friction via user-friendly wallets and platforms.
Work with owners of the work – Collaborate with creators to meet standards of authenticity and creativity.
Go green - Respect the environment, select blockchains that use greener technologies such as Polygon or Flow that allows you to stay in line with your sustainability goals.
NFTs Are Not All Hype
The world of NFTs for brands is evolving rapidly. NFTs no longer apply to collectibles; they provide brands with a valuable utility and customer engagement possibilities, as well as new value creation opportunities. As Web3 marketing rises, this will be the perfect opportunity to establish where the NFT technology can be applied in the overall brand strategy.
Adopting the use of NFTs with utility and blockchain based branding, combined with tokenized models of engagement, allows progressive brands to unlock the potential of the future where digital interactions are immersive, valuable and profitable.
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