How NFTs Will Change Customer Experience
Written By Rina Choukrou - CX Strategist
Whether they turn out to be a revolution or simply a buzzword, one thing is for sure: NFTs are everywhere and they are here to stay. Non-Fungible Tokens entered mainstream consciousness in a big way last year, with major companies and celebrities increasingly engaging and investing in the market. According to a report from nonfungible.com, trading in NFTs hit $17.6 billion last year, an increase of 21,000% from 2020!
But what exactly are NFTs?
An NFT is a unique digital asset that is stored and secured on a blockchain that holds information, such as descriptions, properties, links to any type of media files—from a work of art to a legal document—or that offers related exclusive services. Up until now, digital files could be easily and endlessly duplicated. NFTs make that impossible.
NFTs can even be used as ownership records for physical assets, assuring NFT owners that they are the sole owners and backed by blockchain. The history of every NFT is recorded on the blockchain, meaning buyers can prove their ownership and creators can receive royalties every time their work is re-sold. In this way, blockchains act as a digital certificate of authenticity and are totally tamper-proof. NFTs can be traded on marketplaces, proudly displayed in online galleries or used to access exclusive content and real-life experiences.
A few years after the world’s uberization, we are now talking about tokenization: the creation of the digital representation of an asset on a blockchain. Historically, NFTs have mainly drawn attention through digital art, collectible series and virtual clothes that have reached incredible price points and created a hyper-speculative market. Now, new NFT projects are popping up every week; some creators are just looking to join the current trend, while others want to position themselves as innovators and reach young and engaged communities.
NFTs hold the potential to become a key element of a differentiated customer experience. They are a way to meet customer needs and, as such, represent an opportunity for new lucrative digital offers, which could play an important role in boosting customer engagement. And we are seeing quite a few early signs of that!
“Digital ownership offers brands the opportunity to redefine their relationship with their clients and offer new playgrounds where the engagement will create value both ways..”
- Gabriel Coder, Lead Web3 Strategist
Five Ways NFTs Are Redefining Customer Experience
1. Enhancing and rewarding customer loyalty.
Increasingly, NFT projects focus on providing customers value by giving them exclusive access to products and services. This enables brands to unlock loyalty by incentivizing desired behaviors. Tokens can be gifted, bought in the standard way, obtained through a physical product, earned as rewards by completing a task or through a play-to-earn mechanism.
NFTs are becoming synonyms of exclusive access and such tokens can be redeemed for exclusive products, whether digital or physical. Here, scarcity and artist collaboration is key to driving attractiveness. For instance, Gap collaborated with the artist Brandon Sines for its first NFT collection, in which different token levels can be combined to obtain a limited-edition hoodie and a piece of digital art.
NFT purchases can also unlock premium access and membership. They can be combined with tickets to provide access to events. This allows sellers to verify ticket authenticity, provides creators with royalties for secondary sales, and becomes a commemorative asset for attendees. For example, Coachella created an NFT collection that grants customers lifetime festival passes, unlocks exclusive on-site experiences or redeems physical items. Purchases also include unique perks at the 2022 festival, including a meal by a celebrity chef and front-row access to events. NFTs can also be unlocked when attending an event, as an incentive, and allow later access to exclusive activities or merchandise. This mechanism allows brands to identify and reward superfans.
Non-Fungible Tokens can also become a key part of value-added loyalty programs as a way for customers to earn more than points. Gucci sends Gucci Tokens to identified ambassadors to thank them for posting positively about the brand. With a certain amount of GucciCoins, ambassadors can access an elite community both on and offline (exclusive events, showroom access). They may even have access to limited edition products that others would not get and receive an NFT to show their status. Increasingly, NFT projects focus on providing customers value by giving them exclusive access to products and services. This enables brands to unlock loyalty by incentivizing desired behaviors. Tokens can be gifted, bought in the standard way, obtained through a physical product, earned as rewards by completing a task or through a play-to-earn mechanism.
2. Building communities
NFT projects help build communities around common interests and have the potential to become the means to access brand communities. In New York, the first NFT restaurant is set to open in 2023. The Flyfish Club will be a members-only—or NFT-holders-only—restaurant. The NFT grants holders unlimited access to a private dining room in an iconic location. The venue will include a high-end seafood restaurant, a cocktail lounge, an outdoor space but also a calendar of exclusive events.
NFTs often come with a strong sense of belonging and brands can tap into this sentiment to enrich the brand-customer experience and give token holders access to a community of like-minded people that resonate with the brand and provide value. For example, VeeFriends was created by entrepreneur Gary Vaynerchuck to sell access to his time (conferences, brainstorming sessions, or even breakfast with him). Token holders come together as one community to build friendships, share ideas and learn together. Looking ahead a few years, NFTs could be the central digital touchpoint between brands and their communities…
Read the full article on valtech.com
Valtech combines a unique blend of retail, themed entertainment, and connected experience strategy expertise that positions us perfectly to help brands imagine and design intentional experiences in virtual worlds. Reach out if you want help determining the metaverse strategy that is right for your brand or designing an experience that will leave a lasting impact on your target audience. We look forward to hearing from you!