The world of loyalty programs is about to be revolutionized! Thanks to the emergence of non-fungible tokens (NFTs) and Web3 technology.
NFTs, which were initially used for virtual collectibles, can now be linked to real-world benefits that owners can redeem, making them ideal for loyalty programs. This is especially important as acquiring new customers becomes more expensive each year. In fact, research has shown a 222% increase in customer acquisition costs in e-commerce from 2013 to 2022.
While some may dismiss NFTs as a passing fad, the reality is that they are still finding their footing with audiences. However, this year we expect to see NFTs cement their purpose in a few key areas for brands, including fundraising and consumer loyalty programs. So, read on to find out how you can leverage this emerging Web3 technology to benefit your business.
What Are Loyalty Programs?
A loyalty program is a marketing strategy designed to retain customers by providing exclusive perks while also making them feel valued and appreciated. Despite dating back to the 18th century, loyalty programs remain relevant today. There are nearly four million different ones in the US alone. This underscores their significance in any successful business strategy, particularly in the digital age where customers have limitless choices. Engaging with customers directly and incentivizing repeat purchases is crucial.
A successful loyalty program goes beyond encouraging regular purchases. It should also feature convenience, personalization, and exclusivity. For example, Starbucks Rewards is convenient by simplifying the saving of time and money, personalized by offering relevant promotions based on customer history and data, and exclusive by providing perks and rewards that are unavailable elsewhere or through other brands.
Different Types of Loyalty Programs
|Points Program||Customers earn points for purchases, which they can then redeem for special offers and other benefits.||Sephora Beauty Insider, Starbucks Rewards, Hilton Honors|
|Tier Program||Customers are grouped into different tiers based on their loyalty level, and each tier receives different perks and rewards.||Marriott Bonvoy, Delta SkyMiles, Ulta Beauty Ultamate Rewards|
|Value Program||A company donates a portion of its sale proceeds to a nonprofit or worthy cause, and customers can earn rewards based on their contributions.||TOMS One for One, Warby Parker Buy a Pair Give a Pair, Bombas Socks’ Donation Program|
|Paid Program||Customers pay a fee to join a loyalty program and receive immediate and ongoing benefits.||Amazon Prime, Costco Membership, Sam’s Club|
What is an NFT Loyalty Program?
An NFT loyalty program is a type of loyalty program that uses NFTs to reward and incentivize customers. By integrating NFTs with loyalty programs, brands can offer customers exclusive rewards and experiences that are tied to blockchain technology.
NFT loyalty programs work by allowing customers to earn and collect NFTs as they engage with a brand. Then, the NFTs can then be redeemed for special offers, discounts, or other benefits. For example, a Web3 gaming company might offer rare in-game items as NFT rewards for customers who make frequent purchases or refer new players to the game.
NFTs are particularly well-suited for loyalty programs because they provide a high level of ownership and control for customers. Unlike traditional loyalty program rewards, which are often limited to specific brands or platforms, NFTs can be transferred and traded between different users and platforms. This gives customers the ability to use their rewards in a variety of ways, including selling them on NFT marketplaces or using them in other web3 games.
Successful NFT Loyalty Programs
NFTs have quickly become a popular way for businesses to reward their customers through loyalty programs. By using blockchain technology, companies can create unique and rare digital assets that customers can collect and trade, offering a new level of engagement and value to their loyalty programs.
If you’re interested in learning more about how to apply Web3 technology to retail loyalty programs, check out our presentation on the topic, where we dive into case studies from Reddit and Starbucks.
Several other brands have successfully implemented NFT loyalty programs. Here are a few notable examples:
- Nike: The sportswear giant recently launched .SWOOSH, a web3 marketplace where users can collect, co-create, and interact with digital objects. Eventually, users will trade these goods and gain special access to products, pre-orders, and real-world events. The community will also host challenges for users to win free virtual products.
- Clinique: The skincare brand launched an NFT collection in celebration of its 50th anniversary. The collection featured five unique NFTs, each representing a different decade of Clinique’s history. Customers who purchased Clinique products during the promotion period were entered into a lottery for a chance to win one of the NFTs.
- Burger King: The fast-food chain launched a “Keep it Real” program. It emphasized the use of healthier ingredients and rewarding customers with various perks, including NFTs. Customers scanned a QR code on the meal box to receive a unique NFT game piece. Completing the set earned them a fourth prize, ranging from free Whoppers for a year to a call with Beyonce.
Small Businesses Using NFT Loyalty Programs
With the rise of NFTs, smaller businesses have an opportunity to join in on the trend and attract customers through innovative loyalty programs that set them apart from their competitors.
For example, Liuga, a Singapore-based home and living brand Luiga, launched the JellyVerse NFT collection. Customers who make a certain amount of purchases qualify for a tier-one NFT. After receiving three of these, they can unlock discounts, giveaways, and other member loyalty benefits with a tier-two NFT. Iuiga’s NFT loyalty program was a huge success, with orders increasing nearly three times and furniture sales up by 130%.
Another is Threes Brewing, a Brooklyn-based brewery, which started using QR codes on the sides of beer cans to offer customers free NFTs. By trying different flavor combinations and collecting NFTs, customers can earn a spot on a digital leaderboard. The top collector receives a unique NFT with perpetual perks and discounts at Threes Brewing, incentivizing repeat business.
These examples demonstrate how NFTs can be a powerful tool for small businesses to engage with their target audience and create meaningful loyalty programs that provide tangible benefits to their customers.
What is Web3 Gaming?
Web3 gaming, also known as blockchain gaming, is a type of online gaming that utilizes blockchain technology to create a decentralized and transparent gaming environment. Unlike traditional games that are controlled by a single company, web3 games are built on decentralized platforms, where players have more control over their gaming experience.
One of the unique features of web3 gaming is the use of Non-Fungible Tokens (NFTs). NFTs are digital assets, stored on the blockchain. They are bought, sold, and traded like physical assets. In web3 games, NFTs represent in-game assets like weapons, characters, and other items. Because NFTs are stored on the blockchain, they are verifiable, immutable, and can be owned by players themselves, not just the game company.
|Feature||Traditional Gaming||Web3 Gaming|
|Ownership of in-game assets||Controlled by game company||Owned by players as NFTs|
|Game transactions||Controlled by game company or third parties||Through blockchain technology|
|Game economy||Closed, limited to in-game currency and items||Open, can involve real-world transactions and investment opportunities|
|Player privacy||Controlled by game company||Controlled by players and blockchain technology|
|Player incentives||Achievements, badges, in-game rewards||Cryptocurrency rewards, ownership of NFTs, real-world investment opportunities|
Overall, web3 gaming offers players a more decentralized, transparent, and ownership-driven experience. With the use of NFTs and blockchain technology, players have more control over their gaming experience. Notably from truly owning the assets acquired in the game. This new frontier in gaming is exciting because it shifts power and control back to the players, making for a more engaging and immersive gaming experience.
How to Build an NFT Loyalty Program in Web3 Gaming
With the rise of Web3 gaming and the increasing popularity of NFTs, many gaming companies are looking to incorporate NFT-based loyalty programs into their games. These programs offer players the opportunity to earn and collect unique, valuable digital assets in exchange for their participation and loyalty.
In this infographic, we will explore the process of building an NFT loyalty program in Web3 gaming, from designing and minting NFTs to implementing the program in your game and rewarding players.
To make your NFT loyalty program successful, it’s important to create a user-friendly experience that is easy for customers to understand and engage with. This might involve creating a dedicated loyalty program portal or integrating your loyalty program directly into your game or app. By building a strong, engaging loyalty program, you can create a loyal customer base that is invested in your brand and excited to share it with others.
Web3 Gaming Companies Using NFT Loyalty Programs
Here are some examples of Web3 gaming companies that are leading the way in NFT-based loyalty programs, including their approaches, rewards, and platforms used.
|Axie Infinity||Ethereum||Players earn SLP (Smooth Love Potion) for completing battles, which can be used to breed new Axies or sold on an exchange. Additionally, players can earn AXS (Axie Infinity Shards), which are used for governance decisions within the game.|
|Blankos Block Party||Ethereum||Players can purchase NFTs to unlock exclusive in-game content and earn rewards for participating in events and completing challenges.|
|The Sandbox||Ethereum||Players can earn SAND (the platform’s native token) for completing quests and participating in events. They can also purchase LAND (in-game real estate) as an NFT, which can be used to create and monetize content within the game.|
|Gala Games||Ethereum||Players can earn GALA (the platform’s native token) for participating in events, stacking their tokens, and completing tasks. Additionally, players can purchase and own unique game assets as NFTs, which can be traded or sold on the open market.|
|ChainGuardian||Binance Smart Chain||Players can earn CGG (ChainGuardian Governance Token) for playing the game and completing quests, which can be used for governance decisions within the game. Additionally, players can purchase unique hero NFTs, which provide in-game bonuses and can be traded on the open market.|
Final Thoughts on the Non-Fungible Future
NFTs are a game-changing technology that can revolutionize loyalty programs. Brands can use them to encourage advocacy, engagement, and long-term loyalty by creating a collectible piece of brand history.
However, it’s essential to invest the time to understand what makes an NFT project successful and focus on building engagement and community. Adopting NFTs in loyalty marketing can help your business build a stronger bond with customers, but it requires a clear understanding of your endgame and careful planning.
Consulting with a software partner early in the planning stages can help you identify potential issues and offer the most fitting solutions for your business needs. Restack.AI has a team of experts versed in software, business development blockchain, and NFT technology, ready to help you get the ball rolling on that NFT loyalty program. If you have a project in mind, contact us to schedule a consultation.