21 March 2022
Crypto Loyalty: the real Web 3.0 opportunity for brands /
Uncommon CX founding partner David Yates says blockchain technology presents brands with real opportunities beyond NFT gimmickry
The blockchain changes everything. If we believe the hype of crypto-evangelists.
But there is some truth to the rumor… beyond a few inflated cryptocurrencies and overpriced NFT art auctions, real business opportunities are starting to emerge. And some of the most exciting of these are in the world of customer engagement and loyalty. Whether that’s simply swapping traditional loyalty points for branded tokens (imagine Nectar points becoming $Nectar tokens), or building the infrastructure to design a whole new engagement programme from scratch.
Web 3.0 will bring two big disruptions to the loyalty industry. One internal and often overlooked, and the other external which is often overhyped. Looking at what these are, and how they’re being applied by brands with varying levels of success, can help us create a roadmap to the future.
Behind The Scenes /
Firstly, the blockchain can provide a huge number of internal operational efficiencies for a business running a loyalty programme. Secure decentralised databases will ultimately enable simpler, speedier systems with the ability to work more flexibly across multiple touchpoints and partners without relying on a slow central ‘command and control’ approach.
And because the blockchain is intrinsically more secure and transparent than a traditional centralised database, it can reduce the expense of fraud, abuse and double-spending in points based programmes. Not to mention fostering stronger relationships with partners and consumers.
Front of House: Consumer Collaboration /
Secondly, Crypto-Loyalty allows us to reimagine the external relationship between brand and consumer. The latter will no longer just consume what the brand offers them, but also collaborate and influence what they do. Whether that’s by giving people a financial stake in the products they buy, or supercharging engagement programmes with voting capabilities and dynamic benefits linked to an individual.
Crypto-Loyalty Today /
But readers beware. Whilst the theoretical potential for Crypto-Loyalty is enormous, the current reality is… limited. Most of today’s offerings might best be described as superficial and gimmicky. This risks us dismissing the opportunity of the blockchain, so it’s important we can see past them to the potential that lies ahead.
Socios.com is a frequent poster child for Fan Tokens: tradable digital assets with a utopian vision of allowing sports fans to influence their team – including high profile partnerships with Barcelona, Juventus and Arsenal. But this is not Crypto-Loyalty. It’s a cryptocurrency marketplace masquerading as fan engagement. The types of influence available are surface deep: choosing songs for the locker room playlist, or suggesting a message to be printed inside the captain’s armband. It’s no surprise that all Socios Fan Tokens have depreciated in value since launch.
Crypto-Loyalty Tomorrow /
So how do we deliver true, game changing Crypto-Loyalty? The strongest solutions will combine both the internal operational benefits and a refreshed external customer promise. Meaning that, rather than being treated as a marketing bolt-on, Crypto-Loyalty will be embedded throughout the business model. Imagine rebuilding Nectar, or Avios, or Tesco Clubcard from the ground up as true customer collaboration programmes. A harder, and longer term challenge than launching a branded cryptocurrency, but a worthwhile one. If you look beyond the hype, there are some promising green shoots and signals from the future to be found already:
Music Producer RAC: NFTs that provide ongoing royalties for artists and additional benefits for fans - like airdropped content at events.
Payment Platform Peepl: A UK platform that’s rewriting local economics with rewards that incentivise earning and spending within communities (instead of extracting wealth for the 1%). [Uncommon has worked with Peepl through the Unrest accelerator]
Basketball Player LaMelo Ball: Dynamic NFTs that are more than the standard collectable moments - tied into his performance on the court and unlocking additional benefits for owners.
Poolsuite: An ‘executive membership’ that provides perks and benefits to the online community of fierce brand loyalists that they’ve created, with the promise of more to come.
Friends With Benefits: A group of creators who have introduced a $FWB token to collectively govern and own the community endeavors.
Ultimately, and ironically, the framework for the future might involve going back to the inspiration behind the Socios.com brand name. ‘Socios’ translates as partner or member. Long before the blockchain, this was the term for the 144,000 Barcelona fans who form an assembly of delegates to elect the president and vote on issues that face their club. Demand is so strong that there’s a minimum three-year waiting list. An enticing taste of the level of engagement that Crypto-Loyalty could deliver, if we get it right.
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