Written In Partnership with Brand Partner Content
Despite the often tumultuous world of crypto, non-fungible tokens (NFTs) have become the topic of interest for brands looking to deliver real and lasting value for their customers. NFTs are seen as having the potential to create stickiness and increase retention rates across different industries. While NFTs are undoubtedly here to stay, it’s evident that companies need to better understand how they can better serve business objectives. The following is a conversation with Ethan Song, the CEO of RareCircles, a revenue and engagement platform for Web3, about NFTs and their value to brands.
Q: What are some of the major challenges and headwinds impacting brands today?
Customer acquisition costs keep on rising due to the maturing of digital channels, competition and changes by major tech companies like Meta, Google and Apple. Marketing channels that have worked for the past 10 years and starting to slow down with email marketing as a prime example. Brands are dependent on the algorithms of major social media platforms which are always changing- They don’t actually own their audiences and therefore don’t own their destiny. Traditional rewards programs are not being adopted by a younger generation of consumers. This creates a vortex of challenges looking to grow and retain their customer base.
Q: How can Web3 and NFT technology help to solve these challenges?
Web3 has the potential to create a new relationship between brands and their customers where you turn customers into fans and stakeholders by bringing them into the inner circle. The new generation doesn’t want to be customers, they want to have a voice, be recognized by their favorite brand and provide opportunities to enjoy new experiences. Web3-based memberships is the new frontier of customer loyalty and has the potential to not only create stronger engagement, but also higher lifetime customer value
Q: Why is Web3 different from traditional loyalty programs? Why should brands adopt this technology?
Web3 is different because it’s not about points or discounting, it’s about acknowledging your customers as an integral part of your business and community. It is anchored around ownership and not individual transactions and therefore focused on a long term relationship versus short term gains. Although still early, this new wave of consumer engagement powered by blockchain technology will deliver on what had always been the premise of the internet – to democratize access to all.
Q: What are the key success factors for a brand entering the Web3 space?
1) Be patient: Understand that this is a technology that will have a deep impact on the world for the next 20 years but that we are still in the early innings
2) Test and learn: Not worry about short term monetization but rather testing and trialing the technology with their best customers – Not to be afraid to give tokens and experiences for free
3) Start small: When looking at the Web3 and NFT space, brands tend to think that they have to go big from the start but rather, they should start with smaller communities within their customer base and build slowly and progressively – applying the learnings as they move along
4) Build with your community: Engage your community in building your program – make them part of building their desired outcome
Q: How should companies structure their internal teams to have a successful program? Who should lead it?
Because this is about customer lifetime value and loyalty, this typically would sit under marketing or retention and talent with previous experience in loyalty, community management and customer success would have some of the attributes to contribute to this initiative. Make sure to have a leader that is curious and has the capability to experiment and observe. Work with teams that have technology and above all, experience – much like the company I’m running.
Q: As the founder of Frank And Oak, how would you approach leveraging NFTs in your previous business?
I would start with rewarding my top customers with a free claim that provides them with some simple benefits and expand the program over time. Providing more recognition is the best way to onramp into something new
Q: In 3 years time, where do you think Web3 adoption will be by both businesses and consumers?
I see the technology starting to move behind the scene where it’s not about Web3 or NFTs but about community based ownership and closer experience with your favorite brand. More brands and new companies that are built and governed by their customers i.e. decentralization. We will see a stronger consumer attachment to the brands that understand this – and brands that don’t understand this, will become commodities.
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