The Future of Brand Loyalty With Web3
Imagine a future where you’re loyal not to brands, but to the transactions you have with them. A future where you’re rewarded for every purchase you make, where your data is always protected, and where you’re in complete control of your interactions.
That’s the future of brand loyalty with Web3.
Web3 is a new technology that uses blockchain to create a more secure and transparent online world. This world is fairer for customers and brands alike, as it eliminates the need for third-party intermediaries and allows customers to interact directly with brands.
This is just the beginning of Web3. As technology evolves, so too will the ways in which we can use it to strengthen our relationships with brands. Imagine a future where brand loyalty is based on trust and transparency, rather than habit or tradition. It’s a future we can all look forward to.
1. What Is Web3?
Web3 is a term you might have been hearing more and more lately. But what is it, exactly?
Web3 is a term used to describe the current and future state of the internet. It’s based on the principles of blockchain technology, which allows for secure, transparent, and decentralized transactions. In other words, it’s a way of using the internet that puts users in control of their data.
This has huge implications for brand loyalty. Because Web3 is built on trust, it opens up new opportunities for businesses to build stronger relationships with their customers. And customers are more likely to be loyal to businesses that they trust.
2. What Are the Implications of Web3 for Brands?
As Web3 starts to take hold, brands will need to adapt to a new paradigm of customer loyalty. Gone are the days when customers are content to remain loyal to a single brand. In a Web3 world, customers are more likely to shop around and switch brands as they see fit.
This means that brands will need to focus on building customer trust. They’ll need to provide quality products and excellent customer service, and they’ll need to do it all at a reasonable price. Customers will be less likely to forgive mistakes, and they’ll be less likely to stick with a brand that doesn’t meet their expectations.
So what can brands do to stay ahead of the curve? The best strategy is to embrace Web3 and use it to your advantage.
Use the power of the blockchain to create transparency and build trust with your customers.
Use smart contracts to automate transactions and create a frictionless shopping experience. Use decentralized applications to provide a better customer experience.
The future is looking bright for brands that are willing to embrace Web3.
3. How Can Brands Make Use of Influencers in a Web3 World?
Brands are constantly looking for new and innovative ways to create customer loyalty. In a Web3 world, how can they make use of influencers to achieve this?
An influencer is someone who has the ability to persuade others by virtue of their authority, expertise, or personality. They can be incredibly effective in promoting a brand, as they have the ability to reach a large audience with their message.
However, brands need to be careful when working with influencers. It's important to make sure that the influencer’s values align with those of the brand, and that they aren’t promoting anything that goes against the brand’s values. Additionally, brands need to be aware of the risks involved in working with influencers, such as the potential for negative publicity.
Nevertheless, if done correctly, working with influencers can be a powerful way for brands to build customer loyalty in a Web3 world.
4. What Are the Challenges for Brand Loyalty With Web3?
The biggest challenge for brand loyalty with Web3 is data privacy. With Web2, companies have been able to collect vast amounts of data on users, which has then been used to target ads and personalize content. However, with the introduction of GDPR and other data privacy regulations, this is no longer possible.
Another challenge is the decentralization of the internet. With Web2, most people access the internet through a handful of centralized platforms such as Google, Facebook, and Amazon. However, with Web3, there are an increasing number of decentralized alternatives such as Ethereum and IPFS. This makes it more difficult for brands to reach their target audiences.
Finally, there is the challenge of trust. With Web2, users are used to trusting centralized platforms with their personal data. However, with Web3, users will need to trust a decentralized network of computers (or “nodes”) that are run by strangers. This is a big change for users and will take time to get used to.
5. How loyalty schemes are supposed to work
A loyalty scheme is supposed to work like this: you, the customer, are encouraged to sign up and become a member. In return, you get rewards and benefits that encourage you to keep using the product or service.
The problem is that most loyalty schemes are based on a centralized system, which means that the company running the scheme has complete control over it. They can change the rules at any time, and there’s nothing you can do about it.
“Individual customers may have been just as loyal, but their personal value was no longer recognized in the aggregate.”
With Web3, things are different. Because the loyalty scheme is built on a decentralized platform, it’s run by code rather than by people. This means that the rules can’t be changed without everyone agreeing to them.
What’s more, because the data is stored on a decentralized platform, it’s much more secure. Hackers would need to attack every single node in order to get access to the data, which is practically impossible.
So what does this mean for brands? It means that they can build loyalty schemes that are truly fair and transparent, and that customers can trust.
6. How Can Brands Create Loyalty Programs for Web3?
The key for brands will be to focus on creating loyalty programs that are built on trust. And the best way to do that is by leveraging the immutable and transparent nature of Web3 technologies.
Plus, since blockchain is immutable, customers can be sure that their points will never disappear or be devalued without their consent. This brings a whole new level of trust to loyalty programs and makes them more valuable to customers.
If Web 1 was about “read” and Web 2 was about “read and write,” then Web 3 is about “read, write, and own. We always think of technology as enhancing the human interaction between curators, creators, and levels of fashion, as opposed to replacing that human connection.” — José Neves, Founder, and CEO — FarFetch.
When it comes to loyalty programs, brands need to do more than just offer discounts and coupons. They need to use NFTs to supercharge these programs and give customers real, tangible benefits. Here are some ways brands can do this:
- Soul Bound Membership Tokens
Soul Bound Membership Tokens are a new type of NFT that can be used by businesses to supercharge their loyalty programs. With Soul Bound Membership Tokens, customers can earn points and rewards for purchasing products and services from your brand with the click of a button. You’ll be able to easily track customer transactions and reward them for their purchases. And best of all — you can even use these membership tokens as currency in games!
2. Create Activity/Reputation Tokens
Activity/Reputation Tokens allow users to earn them by using the product or service that they’re already buying. For example, if you were a restaurant owner, you could create an Activity/Reputation Token that rewarded customers who ordered appetizers on their first visit with a discount on their next meal. This would encourage repeat visits and keep customers coming back!
3. Utilize Utility/Exchange Tokens
Utility/Exchange Tokens are like loyalty points in a sense — they can be used for things other than discounts or rewards. For example, I’ve seen companies create Utility/Exchange Tokens that let users buy gift cards with their tokens instead of earning them as rewards for spending money at their own businesses (or restaurants). These tokens would make shopping more convenient for consumers, which is great because convenience leads to increased sales!
7. What Are Some Examples of Web3 Brand Loyalty Programs?
There are already a few examples of Web3 brand loyalty programs. One of the most well-known is probably the Basic Attention Token (BAT), which is a digital currency that can be used to reward content creators for their attention.
Another example is the Steemit social media platform, which uses its own digital currency (STEEM) to reward users for creating and curating content.
And then there’s the ever-popular crypto game CryptoKitties, which allows users to breed and trade digital cats. The game has its own virtual currency, called KittyCoins, which can be used to buy items in the game.
New Starbucks Odyssey experience
Starbucks recently announced Starbucks Odyssey, their NFT loyalty program. Starbucks Odyssey is an extension of the Starbucks Rewards program that members can access using their Starbucks Rewards login credentials. Once logged in, members can engage in Starbucks Odyssey’ journeys,’ a series of activities, such as playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks. The company will reward members for completing journeys with a digital collectible ‘journey stamp.’ Users could join a waitlist using their email I.D.s for a chance to be among the first to receive access to the Starbucks Odyssey experience.
Through ownership of exclusive NFTs, collectors can feel a more profound connection with their favorite brands, which will translate into increased customer loyalty. And since brand NFT collectibles could be sold on secondary markets for profits in the future, purchasing a brand’s NFT could be a new way for consumers to invest in their favorite companies.
“Leveraging Web3 technology will allow our members to access experiences and ownership that was not possible before. Starbucks Odyssey will transcend the foundational benefits that our Starbucks Rewards members have come to love, and unlock digital, physical and experiential benefits that are uniquely Starbucks.”
-Brady Brewer, Starbucks VP and CMO
The Starbucks Odyssey Program is a great example of how Web3 can change the nature of brand loyalty. With this program, customers are rewarded for their loyalty with discounts and free items. This type of program could be used by other brands to create loyalty among their customers.
So as you can see, there are already a few examples of how Web3 is changing the nature of brand loyalty. We can expect to see many more in the years to come!
8. How does web3 elevate loyalty programs for brands?
Digital Ownership Can Breathe New Life Into Traditional Customer Loyalty Programs in the following ways:
- Boosting customer buy-in: Ownership can cultivate a sense of belonging, generating a stronger sense of customer connection and buy-in.
- Reinforcing brand image: Whether artwork, music, or other media, NFTs can be creatively designed to emphasize essential elements of a brand’s identity. While stickers and magnets may still have their place, a permanent, branded digital asset that belongs to the customer will stand out above traditional marketing swag.
- Fostering relationships between customers: Web3 tools can cultivate customer interactions, creating community around a brand and spurring a positive feedback loop for brand loyalty.
- Providing added value to customers: NFTs have the potential to deliver more meaningful financial rewards to customers. Utility NFTs can unlock discounts or experiences, and they gain even more value when they are transferable. In these ways, NFT ownership can deliver value that encourages positive sentiments toward a brand and ongoing participation in its community.
- Interoperability: On-chain ownership facilitates interoperability that can supercharge rewards programs. Traditional rewards programs depend on custom internal databases. On-chain rewards provide an entirely new paradigm through instant and permissionless data integration. For example, on-chain data makes it easy to partner with various third-party perks providers who can offer customer rewards to certain tiers of customers. Because data is visible on-chain, rewards holders could even receive airdrops, IRL event invitations, or other benefits independent of the company as NFTs.
Conclusion
It’s clear that Web3 is changing the landscape of brand loyalty, and that businesses need to be prepared to adapt. With the rise of influencers and the decentralization of the internet, customers are more empowered than ever before. They have access to more information and can make purchase decisions based on their values.
Businesses need to focus on building trust with their customers and creating loyalty programs that reward customers for their loyalty. Influencers will continue to play a role in driving brand loyalty, so businesses need to identify and work with influencers who align with their values.
The future of brand loyalty is in the hands of the customer, and businesses need to be prepared to adapt to this new reality.
