This article originally appeared on LinkedIn.
Promoters are an amazing ally for any company, an unparalleled asset. Rallying them can have a huge effect on a company’s business. Today, new technologies are providing exciting new ways to do that.
For instance, nonfungible tokens (NFTs) are spurring some interesting experiments. Originally conceived largely as tradable assets, NFTs are now being applied to customer loyalty programs in intriguing ways.
As our Bain colleagues recently explained in “Beyond Bored Apes, NFTs Will Revolutionize Customer Engagement,” NFTs have certain unique properties that open up a variety of new ways to engage and reward customers:
- NFTs are game-able. After 10 purchases, flights, or hotel stays, the consumer could earn an NFT redeemable for a gift. Or the company might randomly award NFT holders a shopping spree, a seat upgrade, or a bottle of wine at check-in.
- NFTs are stackable. Content can be attached to verify participation and capture the memory. One reward on a dining platform might consist of an upgrade to the chef’s table, and the menu and a picture of the party with the chef could be attached to the NFT as a keepsake.
- NFTs are tradable. It’s easy to share NFT-based rewards with friends and family. The rewards program becomes more effective the more customers value it, and they value it in proportion to the opportunity to actually use the NFT.
- NFTs are programmable. If the business wants the reward to expire on a certain date or to provide a richer benefit at off-peak times, that can be included up front in the smart contract.
- NFTs are interoperable. NFTs can operate in a decentralized manner, enabling easy connectivity and collaboration with other brands, creators, influencers, consumers, and collectors.
Any NFT program should conform to the established principles of good customer loyalty programs, of course. Loyalty programs have evolved over time from an exclusive focus on freebies to rewarding customer behavior and achievement through personalized benefits, delighting them in new immersive, experiential ways. American Express’s membership rewards program is a pioneer of this philosophy, and Amazon rewrote the paradigm with Prime.
What all great programs have in common is a laser focus on what the customer really values. In addition to savings, successful loyalty programs can convey value to loyal customers in many ways—for instance, by making their experience easier; granting them access to specials; or offering prestige, fun, affiliation, or impact. Peloton, Reebok, and others have customers earning badges, tiering up, and unlocking rewards for achieving goals—a model of fun pioneered by gaming companies. Nike Run Club taps into the power of experience, cultivating a sense of community and exclusivity while mining a deep brand affinity and emotional connection with consumers. Strava, an app for tracking physical exercise, has used a series of fitness challenges to appeal to customers’ desire for a sense of community and belonging. NFTs create community, too. Getting one makes you part of a new “in” group.
As these examples show, well-designed digital approaches can help companies build programs that customers will find compelling and that will deliver business value.