Non-fungible tokens, also known as NFTs, will soon be the most popular and well-accepted technology for documenting the ownership of an asset. Examples of NFT could be as simple as a piece of art or as complex as a real estate property. A new use case of NFT has recently come into the discussion i.e. is the use of NFT to reward loyal customers. Few companies like Starbucks, and Clinique have a well-established ongoing NFT rewards program. This space will discuss how to start an NFT reward loyalty program for your business to engage your customers and derive better business results.
What is NFT Reward Loyalty Program?
Traditionally, there have been a lot of loyalty programs that businesses have adopted. The common aim of the loyalty program has always been to increase customer engagement, reward loyal customers so that they stick to their brand, make repeat purchases, and collect customer data to understand who they are and what their purchasing practices are.
Knowing the customers and keeping them engaged helps the companies in driving up sales and business. With the advent of blockchain and technology, loyalty programs have transformed into the NFT Rewards Loyalty Program. While the basic principle of a loyalty program remains the same, however, it is now presented along with blockchain technology.
NFT Reward Loyalty program is a blockchain-based loyalty program where the rewards that are distributed to loyal customers are in the form of Non-Fungible Tokens (NFT). These rewards can be used in multiple ways which shall be explained in further detail as we proceed in this space.
Must Read – How to Purchase an NFT from an Offline Store?
How to Start NFT Rewards Loyalty Program for Your Business
Following are the steps from inception to the launch of the NFT reward loyalty program for your business: –
1. A Shared Loyalty Program or an Individual One
The first step is to decide the type of loyalty program you want to implement for your business. Broadly there are 2 types of loyalty programs: –
a) Shared Loyalty Program for Multiple Businesses/Companies
In this type of loyalty program, multiple businesses participate in a single loyalty program. In such a scenario, regardless of whichever participating vendor the customer purchases from, he/she gets entitled to receive the NFT rewards.
The biggest benefit of this loyalty program is the number of NFT rewards that a customer will collect from multiple participating companies, adds up. Thereby the tendency to shop more to collect more reward points will eventually help the participating companies.
The other benefit of this type of loyalty program is that it is quite economical to participate in. Since the technology cost and the data maintenance cost are passed on to the third-party company, a minimal participation fee is required from your business to participate in the NFT loyalty program.
b) Individual Business Loyalty Program
If you decide to have your loyalty program which shall be very specific for your customers, then you can opt for Individual Business Loyalty Program.
The benefit of this type of NFT loyalty program is that the data of your customers is not shared with other businesses. Thereby you as the owner of the business can taste the real juice of the NFT Loyalty reward program.
On the contrary, the cost of building and maintaining the technology is quite high as you shall need to bear all the costs. Businesses that have high revenue and considerable footfall of customers can opt for this type of loyalty program.
2. Type of NFT Reward Loyalty Program
Once you have decided whether to go for a shared loyalty program or an individual one, the next step is to decide the type of loyalty program that will suit your business. Following are the 4 types of NFT loyalty reward programs that you can choose from: –
- NFT Point Collectible Program
Under the NFT Point Collectible Program, you will set a flat-point system for the customers. With each purchase, depending on the value of the purchase, the customer will get points in their loyalty wallet. When the points in the wallet reach a minimum threshold (pre-decided by the business), the customer shall be able to convert the points into NFT and use them either as a collectible or in exchange for discounts or monetary value.
- NFT Tier Level Program
Under the NFT Tier Level Program, you shall set various tiers for the loyalty points collection. For example, on collecting 100 loyalty points, the customer shall be entitled to Tier 1 and will automatically receive 1 NFT reward in the wallet. Thereafter on collecting the next 100 loyalty points, the customer shall be now entitled to Tier 2 and will receive 2 NFT rewards in his wallet and so on.
Most business owners find tier loyalty reward programs better than others since the customer is incentivized to shop more.
- NFT Share Program
This is a less common type of loyalty program. Here the customers are credited loyalty points based on the overall performance of the business. These loyalty points can later be converted for the equivalent value of NFTs.
- NFT Paid Program
If you are a big brand and have a strong customer base, then this might be the right loyalty program for you. You can launch your brand’s NFT which the customers can buy and store in their wallet as a collectible. An NFT in the customer’s wallet will help in brand retention.
3. Deciding the Technology
Once the NFT Loyalty program type is decided, the next step is to decide the technology vendor for your loyalty program.
If you plan to go for a shared loyalty program, then, you don’t need to worry about the technology partner, since the third-party company that will onboard your business will deploy and maintain the NFT loyalty reward distribution.
However, if you plan to go solo and have your own NFT loyalty reward program, you can start from scratch and have an in-house team to build the whole software. Even though the control over the software will be more, turnaround time for any software customization will be less and the source code will always be with you, the cost of maintaining it will be quite high.
On the contrary, there are platforms where you can simply plug and play. The readymade software, will allow you as a business owner to create and distribute NFT rewards. You will be also able to configure the tier loyalty point system and flat loyalty point program on the software. Since the technology will be maintained by a third-party company, you will only need to pay an annual maintenance cost which will be a fraction of the cost to have it developed in-house.
4. NFT Token Redemption Value
Once you have finalized the type of NFT loyalty reward program and the technology to run it, the next step is to have a redemption plan for the customers earning the NFT rewards.
NFT rewards program run by third-party companies, that enroll multiple businesses, will have their redemption plans and you therefore do not need to have a plan of yours.
However, if you design your own NFT Reward program, the NFT rewards can be planned to be exchanged as one of the following:-
- Discounts for upcoming purchases
- Exchange NFT reward in exchange for monetary value
- Have a tie-up with other businesses to accept your NFT in exchange for their product and services.
- Let customers enjoy NFT as a collectible.
5. Analytics
After spending considerable time and effort in deciding the type of NFT reward program, its redemption strategy, and the technology to run it, if the customer data collected is not brought to use, the whole effort is wasted.
NFT rewards will lure the customer however for you to actually benefit from the reward program, capturing the customer’s data and purchasing habits is quite essential. This data can be converted into a sales funnel which will eventually help in driving out further business from it. For example, if you are going to plan a sale on Baby Diapers, you can check the customer profile and target social media ads for these customers. With these targeted advertisements, the business can expect a good conversion rate for their business.
Is the NFT Reward Loyalty Program Right Fit for Your Business?
If your business is not moving or you are not able to attract the new generation to your business portfolio, getting into the NFT reward program is a good idea. Entering at this point will only help you stand out and will also act as a source of advertisement for your business.
You as an employee or decision maker in your organization should plan out for a NFT Reward Loyalty program soon and make a mark in the market.
