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This article gives an overview of an NFT loyalty program: how they can overcome the challenges of traditional loyalty programs and how businesses can use NFT development services to transform their customer-brand relationship.
What is a Loyalty Program?
A customer loyalty program is an approach in which enterprises offer discounts, rewards, and other incentives to their frequent customers. The program attracts and retains customers and encourages them to repeat purchases.
Apart from attracting more customers, the program also increases average order value, improves retention, and enhances brand advocacy. Additionally, it makes customers feel valued.
Businesses offer different loyalty programs, the points program being the most popular form.
Suggested Read: Exploring Blockchain Technology to Enhance Loyalty Programs
Challenges associated with Traditional Loyalty Programs
Even though these programs aim to value the customers, they are not gaining much success in the cryptocurrency space. For instance, many businesses claim to be offering the portability of loyalty points. However, if customers have rewards credit cards, they can only redeem them for airline or hotel rewards.
Such scenarios make customers feel not valued by the businesses since they do not get to set the porting items and redemption formula.
Instead of being open ecosystems, loyalty programs are point-to-point partnerships. So, they require more effort to establish, maintain, and scale. Moreover, companies often need help managing these programs.
Traditional loyalty programs may lose their charm if consumers refrain from using them or forget about their existence. Here, non-fungible tokens (NFTs) can create an interacting digital relationship with the customers.
Also, Visit: Maximizing the Efficiency of Loyalty Rewards Program Management with Blockchain
NFT Loyalty Program
NFT loyalty program is a boon to foster customer retention. It is a method that uses NFTs to reward customers. NFTs are unique digital representations of valuable assets on a blockchain. Since NFTs have modular and adaptable designs, businesses can use them for product ownership verification, purchase incentivization, member accessibility, brand interaction gamification, and more.
NFT loyalty programs can boost customer loyalty by encouraging them to hold NFTs even in the future for additional perks and benefits. It provides validation and protection against fraud.
NFTs are interoperable. So, users can redeem them for physical products or digital assets, including music, art, and more. Users can gain exclusive access to events, buy in-game assets in the metaverse, and more. NFT loyalty programs provide safe, easy, and enhanced value systems for consumers.
Explore: Advancing Loyalty Programs with Hyperledger Blockchain
The Potential of NFTs in Loyalty Programs
NFTs in loyalty programs offer the following potential benefits:
Personalized Rewards
In Web3, a wallet-based login confirms a user's identification and establishes proof of loyalty using an NFT provided by a brand. They then exchange information in exchange for benefits such as early access or an invitation to a launch event. If customers no longer want to participate in the loyalty program, they can transfer their membership to another customer who wishes to join the program or build their earnings.
Membership Programs
NFTs can help customers gain exclusive access to the brand's loyalty program and specific benefits. Due to the large memory of distributed ledger technology, businesses can effortlessly create a membership program with NFTs. For instance, the travel industry can use NFTs in the hospitality and transportation segments.
Check It Out: Gaming NFT Marketplace: A Comprehensive Analysis
Tokengating
Tokengating adds more value to NFTs by giving exclusive access to communities, special features, content, and more to NFT owners. It enables customers to gain early access to new NFT releases and airdrops. Additionally, token-gating gives users VIP status at community events, retail-store inaugurations, and in-person activations.
Transparency and Efficiency
NFTs using blockchain technology can provide secure and transparent transactions and automatic agreements. As with other blockchain-based transactions, these advantages may decrease the need for intermediaries and the danger of fraud and counterfeiting.
Suggested Read: Most Resourceful Blockchains for NFT Development
Implementing an NFT Loyalty Program
You can get quite creative with the implementation of your NFT loyalty model. We've included our top five suggestions below:
Use NFT Traits to Give Unique Rewards
One of the reasons for their explosive popularity is the range of diverse properties that non-fungible tokens might have, in addition to the rarity associated with them. Brands can use membership tokens' dynamic qualities to upgrade levels or provide consumers with customized benefits depending on their engagement and purchases with the business.
Social Rewards
Another excellent method for interacting with your audience is offering NFT reward programs with a unique social element. For instance, you can donate some or all of the revenue from selling your loyalty tokens to charitable causes. One method is to use tokenized carbon credits.
People tend to band together for a good cause. Meanwhile, you'll be able to achieve two things: helping make the world a better place and establishing a community of devoted customers.
Unique One-Time Benefits
Unique one-time benefits give customers only one reward for loyalty, as they can redeem their NFTs only once. Some examples may include access to private events or coupons and discounts for a physical asset. This way, a brand will continue to interact with its customers. Customers must produce a QR code to access the benefits in exchange for NFTs. Powered by innovative smart contract development, these tokens will destroy themselves after reward redemption.
Also, Read: NFT Smart Contracts | Applications You Must Know
Top Businesses Using NFT Loyalty Programs
We have enlisted below some of the top businesses that are utilizing the potential of NFT loyalty programs:
Starbucks
Starbucks' loyalty program is among the most successful reward schemes worldwide. The firm recently released Starbucks Odyssey, a new experience where customers can earn or sped NFTs. Customers can use their NFTs to gain exclusive access to special coffee offerings. Starbucks collaborated with independent artists to create NFTs. Polygon stores these NFTs, and customers can buy, sell, or trade them on Starbucks' marketplace.
Clinique
Clinique is among the first Estée Lauder brands to tap into the opportunity of the NFT loyalty program. The beauty brand has launched a rewards scheme wherein shoppers can register themselves. It gives these shoppers a chance to get free products for ten years and one of three versions of an NFT artwork.
The NFT, named "Meta Optimist," is a conceptual "molecule" that alters colors according to two of the company's two bestselling products. The products are Moisture Surge 100H moisturizer and Almost Lipstick Black Honey.
Salesforce
Salesforce, a customer relationship management software company, has developed Salesforce Web3, an NFT management platform, to assist its clients in creating token-based loyalty programs.
Salesforce Web3 subscription tiers allow companies to mint and trade NFTs, track blockchain activity, and view real-time customer data.
Also, Read: Fractional Real Estate NFTs: The Next Wave of NFTs
NFT Loyalty Program Development
In summary, NFT loyalty programs are the future of customer-brand relationships. With their unique properties and modular designs, NFTs provide a safe, easy, and enhanced value system for consumers, and businesses can leverage them to foster customer loyalty and promote repeat purchases. It requires the tools and support to create, deploy, and manage your NFT-based loyalty program in a user-friendly manner. Oodles is a platform with all the tools and support that makes the process easier for you. Contact our NFT developers today to avail of our services.
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