An NFT loyalty program uses NFTs to reward customers to promote repeat purchases. Read on to get an in-depth understanding of this concept.
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.
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 types of loyalty programs, the points program being the most popular form.
Suggested Read: Exploring Blockchain Technology to Enhance Loyalty Programs
Even though these programs aim to value the customers, they do not seem to be gaining much success in the area. 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 find it challenging to manage these programs.
Traditional loyalty programs may lose their charm if consumers do not use 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 is a method that uses NFTs to reward customers. NFTs are unique digital representations on a blockchain of valuable assets. Since NFTs have modular and adaptable designs, businesses can use them for product ownership verification, purchase incentivization, only 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
NFTs in loyalty programs offer the following potential benefits:
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 a customer no longer wants to participate in the loyalty program, they can transfer their membership to another customer who wishes to join the program or build their earnings.
NFTs can help customers to gain exclusive access to the brand's loyalty program along with specific benefits. Businesses can effortlessly create a membership program with NFTs due to the large memory of distributed ledger technology. For instance, the travel industry can use NFTs in the hospitality and transportation segments.
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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.
NFTs using blockchain technology can provide secure and transparent transactions as well as automatic agreements. These advantages, as with other blockchain-based transactions, may decrease the need for intermediaries as well as the danger of fraud and counterfeiting.
Suggested Read: Most Resourceful Blockchains for NFT Development
You can get quite creative with your NFT loyalty model implementation. We've included our top five suggestions below:
The range of diverse properties that non-fungible tokens might have, in addition to the rarity associated with them, is one of the reasons for their explosive popularity. Membership tokens' dynamic qualities can be used by brands to upgrade levels or provide consumers with customized benefits depending on their engagement and purchases with the business.
Offering NFT reward programs with a unique social element is another excellent method for interacting with your audience. For instance, you can donate a portion or all of the revenue from the sale of 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 to make the world a better place while also establishing a community of devoted customers.
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 need to produce a QR code to access the benefits in exchange for NFTs. These tokens, powered by smart contract development, will destroy themselves after reward redemption.
Also, Read: NFT Smart Contracts | Applications You Must Know
We have enlisted below some of the top businesses that are utilizing the potential of NFT loyalty programs:
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 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 a chance to these shoppers to get free products for ten years as well as 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, 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
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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