What is a brand? Historically, it’s been a particular identity or image regarded as an asset — an intangible concept that helps people identify a company, product or individual.
However, in an era of increased connectivity with abundance of information and smarter consumers, brands are no longer something that helps consumers to identify, but rather something that people actually identify with.
As it’s never been easier to start a business, customer acquisition costs are skyrocketing, and every influencer and their dog has a brand, the key to building a sustainable brand is identifying your values, aligning with a community of superfans who share those values, and building relationships with those customers while continuing to provide long-term utility — the result will be improved long-term retention.
If a customer’s relationship with a brand had no meaning, everyone would just buy private label products with no brand attached. It would be a race to the bottom in price.
What separates a successful retail experience from a mediocre one? Meaning — some sort of significance or intangible value, whether implied or explicit.
Competition is greater than ever, and customers are increasingly savvy to old marketing methods. Modern brands need an edge. There are four key ways brands can create meaning: establishing identity, sense of ownership, fostering community, and overcoming challenges.
1) Establishing Identity
Identity or status is the most well-known form of meaning which brands can uphold — and it’s also one of the most difficult to create. Major luxury brands like Louis Vuitton and Apple do this better than anyone.
Our favorite brands play a role in shaping our identities.
When you walk down the street holding the latest iPhone, it’s a signaling mechanism. When you’re carrying a device that costs more than $1,000, it says something about you, whether you like it or not.
If executed properly, any brand can create status or identity in a way that’s accessible to a wider group of customers (not just those with deep pockets).
For example, a coffee chain could offer a special “voyager badge” for customers who visited 10 or more different locations. This badge could unlock a unique benefit (say, a sleek refillable mug with special discounts that only those who have completed the challenge receive). Now, carrying that special mug is a status symbol that associates the holder with the coffee shop’s brand and its values.
Web3 loyalty programs make this simple to execute, as each customer can carry their status with them wherever they go (both in the digital and physical world).
2) Sense of Ownership
Similar to identity, ownership can create meaning by the way it makes a customer feel. Through a phenomena called the Endowment Effect, individuals value an owned object more highly, often irrationally, than its market value.
The endowment effect is especially true in products with a high upfront investment of time and money, as well as those with sentimental value.
In a sports example, the Green Bay Packers are the only NFL team entirely owned by its fans. Despite having the smallest Metro area by population of all NFL cities, Green Bay has what many consider to be the most passionate fan base in the entire league, with a loyal following that spans the globe.
With modern web3 loyalty programs, it’s now possible for any brand to align incentives with their customers and now make them stakeholders in the brand’s success.
3) Fostering Community
Another effective (albeit difficult) way to create meaning is through community. People like to associate with others who share similar values — it’s a core part of the human experience, after all.
Tracksmith, a running apparel brand, is a prime example of building community through its values. Beyond its high quality apparel, they offer inspiring publications and distinct experiences to the members of its Hare Athletic Club. They even put on local races and events with the running community that center around its core values of love for the sport, dedication to the craft, and fondness for its New England roots.
While community can be difficult to build, loyalty & membership programs are one way for brands to get started, as it allows them to build closer and more personalized relationships with their customers.
Through proof of identification enabled by web3, brands can now verify who their most loyal customers are and allow them gated access to novel experiences (in Tracksmith’s case, this could be a special track meet that only Hare A.C. members can attend).
No matter the brand, everyone would benefit from a stronger community.
4) Overcoming Challenges
A final way to create meaning is through overcoming challenges. Think of your most meaningful experience in life, and chances are it involves overcoming some sort of obstacle. There are countless examples of challenges creating meaning in the gaming industry, and it’s no surprise that gaming has exploded in popularity over the last decade (the industry itself is worth nearly $200B and growing quickly, according to some estimates).
The actions to complete the challenge don’t necessarily need to be transactional (monetary); but even if they are, it’s still possible to create a game out of normal everyday purchases.
In the QSR industry, McDonald’s offers a prize on every order through its McDonald’s Monopoly program, and despite the expected value of each prize being worth less than the fries, customers continue coming back for a chance at winning. In fact, despite the broader stock market downturn, McDonald’s cites its Rewards program for propelling its price to an all-time high this past week.
What if brands took a page out of the gaming playbook and turned their shopping experiences into multiplayer competitions?
The local coffee chain we mentioned before? They could track the number of orders for each customer and create a public leaderboard. In return, maybe the top customer of the year receives an all-inclusive weekend trip with VIP tickets to a concert their choice.
The opportunities for brands to create challenges (games) for their customers to complete are endless. The key is that customers feel some sort of agency in the outcome of the game and are rewarded for their efforts. We’ll dive deeper into games and loyalty in a future article.
In a world where there’s more competition than ever, it’s never been more important to build a valuable brand.
The product is not what matters. What it means to the customers is what matters.
As a brand, don’t just launch an NFT program to say you’re in web3. Do it to really unlock a special relationship with your customers.
