NFTs as an ultimate tool for brands and companies (and how to start now) Part 2.
In the previous article — Part 1, we explained the challenges of current Web2.0 loyalty programs and why the blockchain and NFT tokens are the next big thing for brands and companies. But we end up with a question —
“So why should you care about loyalty points in the form of NFT tokens?”
The game-changer part is the transformation of “just points” to NFTs as a programmable, brandable digital assets, that also doubles as an access pass, with a broad potential to create an expanded, shared-ownership model for loyalty, offering the unique experiences, community building, storytelling, and customer engagement, with a big advantage for customers to earn from the liquidity in secondary markets on public blockchains and for the brand earning the royalties from every sale on the secondary market.
This completely turns the business model of traditional loyalty programs on its head.
These features give a stronger incentive for users to earn NFT rewards since monetary benefit can be immediately cashed out on the secondary market and royalties from sales are going straight to the brand’s pockets. As you see, liquidity makes tokenised loyalty rewards more attractive than loyalty points confined in walled gardens.
“Everyone is a winner.”
In the language of economics — this extra incentive creates an upward shift in the demand curve equal to the amount of discount, which manifests as user growth & higher usage from existing users. Resulting equilibrium price, quantity & producer surplus are growing.
In traditional loyalty programs companies give out a subsidy in form of loyalty tokens. But in the Web3.0 model, do benefits really outweigh subsidy costs?
For example, signup bonuses are a great incentive for the new users in exchange for bootstrapping the adoption. But it’s very expensive unless you are a VC-backed startup with significant seed investment.
But if the signup bonus is in NFT form, it doesn’t impact the company’s current cash position. Instead, tokens given out today, subtract from tomorrow’s revenue as users redeem tokens for the company’s products & services in the future.
“Invest your future revenues to fund your growth today.”
With help of the secondary market to extend liquidity, you can use future (unrealised) revenues to fund growth today. This is much more flexible marketing spend possible for a wider range of companies.
Additionally to that, for example, using different NFT collections or drops identified by their contract address, you can adjust the redemption ratio, to change how much discount in $ terms you’re giving out at a different time, depending on the market prices of your product & your NFT collection.
This requires change of mindset of marketeers but in a result, it comes with much more advantages and surprises.
Secondary markets & metaverse as your additional marketing channels
The fact that your token is circulated on secondary markets means it interacts with many more people than your direct user base. And an asset of stable value can be incorporated into other financial instruments, even if we are talking about redemption or monetary policy can further extending your reach. You as a collection issuer — issuer of NFT loyalty rewards, want to build long-term trust in your collection by aiming for an interesting floor price. So the user incentive will suddenly change from expecting the token to appreciate, to earning more tokens, therefore interacting more with your brands marketing campaigns, products and services. We can’t forget to mention that loyalty rewards as NFTs are ready for your brand to be transformed into mechanisms of Metaverse in the future.
How difficult is it to start creating NFT loyalty rewards right now?
This loyalty rewards use case is one of the examples of why we started Droplove. A quick, easy-to-use tool, which would help you to create your own smart contract without the knowledge of solidity language or writing a single line of any code.
Set your name, symbol, and supply.
Deploy it on testnet or mainnet.
With Droplove Dashboard, we are giving you the power of constant control over NFTs minted on your contract.
In contract detail, add your links to assets later, or anytime you want, right after you will be sure, your contract works and you see it on Etherscan.
The owner of the contract can change the address to visual files & metadata anytime, allowing creators to turn NFTs into dynamic multimedia channels.
Each contract owner can transfer the control and whole contract to a third party, making Droplove a super-powerful web3 tool, dressed as a tiny three-step contract shop in web3 metaverse.
Inspiration comes from: https://taschalabs.com/utility-tokens-from-real-businesses-will-drive-next-wave-of-crypto-adoption/
We are building the no-code tool to deploy and manage NFT smart contracts! Want to know more? Check out our website.
If you would like to ask us anything or interact with our growing community, Join us on Discord.
