Loyalty and community in the web3: how to deal with it (Part 1) — Meta Art Marketing

One of the main goals of marketing communication is building a relationship with consumers. We want to accompany customers to become more connected with the company, brand, or even a project. The marketing theory provides us with two similar definitions to describe this type of connection with them. These definitions are community and brand loyalty. The marketing definition of community describes a group of people centred around the brand who share the brand’s ideals and are connected to them. Most studies define brand loyalty as a mental engagement with the brand. As we can see, they are pretty similar in their definition. Still, their unclear positioning in the marketing strategy of the NFT project can cause problems, so here I try to explain how they influence each other.

What is brand loyalty?
Brand loyalty is a mental adherence between the person and the product/brand. Although some details of the definition vary among different researchers, we will focus on the most common meaning. Thus, In classical marketing, we define four types of loyalty status:

Loyal customers become an essential asset for a business to stay sustainable in a changeable world. There are many reasons why it is necessary for business. Consumers with a high level of loyalty tend to recommend a product more often and intend word-of-mouth marketing. For a project, brand, or company, the customers’ high level of loyalty means being less vulnerable to crises. Additionally, people with brand loyalty are ready to pay a higher price for the same product. Furthermore, it is less expensive for companies to handle old customers rather than acquire new ones.

We understand how it works in a more conventional part of (e)-commerce. There are even several types of research related to art. For the NFT project and brands, it works similarly. One potential roadmap for customers is the DAGMAR model, where the customer should follow the road through different stages: category awareness, brand awareness, brand knowledge, liking, preference, and trial. Therefore, by guiding the customers through these maråketing objectives, we can achieve a high percentage of loyal users/customers/etc.

Several metrics can help to measure loyalty, such as purchase frequency, Net Promoter Score, or the result of qualitative research. However, the repeated purchase is not the same as loyalty. The purchase frequency can be one of the metrics for measuring it.

What is a community for the NFT industry?

The NFT industry consists of many participants, including infrastructure companies, creators, investors, and third-side companies, who use the NFT as one more marketing channel. The prominent place for communication with stakeholders is their social media channels. Here the companies also speak with their communities. But what is a community?

In the sense of web3, many people start speaking about exclusive place of community in industry, drawing the parallel to web1. It was the time when the internet was functionated without big tech businesses. Nevertheless, communities started to be a part of marketing strategy at least 20 years. In web3, it starts to play a more prominent role, negotiating for new privileges and opportunities. For instance, now they can take part in decision-making.

The central part of a community is a shared virtual space and people’s sense of affiliation. Therefore, people can call the community followers on their social networks, including Instagram, Twitter, or Discord. These people can actively and passively participate in brand account activities.

But what if we would say that community and brand loyalty influence each other?

Different studies show that the relationship between usefulness, trust, and loyalty is significant in the sense of attending to the community. By increasing the usefulness of potential participants in the community, we can increase the number of members. In the same way, the members’ loyalty improves the quality and sustainability of the community.

In that way, the loyalty toward the brand or project influences the community. Therefore, the community grew faster due to word-of-mouth marketing; it became more sustainable because of its loyal core.
However, not all people in the community are part of loyal members. And given the growing number of web3 communities in which the average person is a member, this ratio decreases.

Having a well-developed active community allows web3 brands and projects to apply other marketing objectives successfully and guide people through the stages of communication to increase loyal community members or solve other marketing problems.

To sum up, loyalty relates to the mental engagement of customers toward the brands or projects. The community is about physical engagement in the activity of the brand. And as we can understand — they are pretty connected to each other and both are significant for marketing strategy.

In part 2, I will draw some examples of working with loyalty to the community.

Originally published at http://metaart.marketing on June 1, 2022.