Part of the resistance of cryptocurrencies and digital assets in general stems from their versatility. Every time I feel like I’m hitting rock bottom, someone contacts me with a new cryptocurrency use case.
More recently, it was Dan Jurek, vice president of strategic services for the Lacek Group, who came up with a few new versions of established use cases for digital assets. The Lacek Group is a loyalty marketing agency focused on driving consumer engagement for Fortune 1,000 companies.
Digital assets such as NFTs and cryptocurrencies not only offer new opportunities for brands to reward loyal consumers, but they hold the promise of building deeper relationships between businesses and their customers.
“It feels like we’re in one of those interesting phases in our industry because this burgeoning area of cryptocurrency and metaverse is so perfect for what we’re doing,” Jurek said. “With so much technology, we can deliver personalized experiences based on what we know about customers. †
In the simplest example, Jurek says that some brands use cryptocurrencies as a payment method for their customers, or use digital assets to directly reward desired consumer behavior. Other companies themselves are leveraging blockchain technology to provide traceability, transparency, and transaction security. Still others use NFTs for advertising and promotions.
As new layers of digital assets are developed and new applications are innovated, companies have the opportunity to go much further, Jurek said.
“We’re seeing the metaverse and web 3.0 being used to hide promo codes, and companies that incentivize people to look at the metaverse and earn stuff — that’s where I think there’s going to be a lot of growth,” Jurek said. “In NFTs, we’re seeing quite a flooded market, but it has become the path of least resistance for companies to meddle in the space. NFTs are how brands dip their toes in water.
Jurek identified four trends that determine how companies use digital assets to retain consumers.
NFT Auctions for a Good Cause
“I liken it to an art auction — people can bid on NFTs, and if you’re a higher bidder, you win the NFT,” Jurek said. “This has been happening for a while. The real question is what brands will do with it to make sure customers feel valued and stay top of mind, which is why NFTs exist for a good cause. It’s like a badge of honor.
When a brand auctions off a series of NFTs to support a good cause with the product, consumers can “wear” or display the NFT as if it were a “badge of honor,” Jurek said, meaning others on social media or in the metaverse. can see that a person supports or is involved in a social, political or religious cause.
In particular, NFTs allow brands to be flexible with what they offer consumers, Jurek said.
For example, consider two different cosmetics consumers, Mary and Amy. Mary spends $5,000 a year on cosmetics, while Amy spends $1,000.
“Knowing this, we can differentiate the value we provide to each of these two NFT holders and leverage that for cross-selling and up-selling,” Jurek said. “So if Amy buys certain types of moisturizers, we can provide her with authentic offerings and experiences — perhaps an exclusive experience with a favorite makeup artist. Because she has an NFT, she could be one of 50 people who can.
Stimulate desired consumer behaviour
“What brands are really doing right now is saying ‘we want you to take this survey so we can understand you better, and in return we’ll give you this NFT or cryptocurrency,'” Jurek said. “With digital assets, they can also go further – if a consumer gives us their information within 30 days, their NFT can be exchanged for an x amount of product and an additional opportunity to buy stuff.”
In other words, digital assets can be a carrot for getting people to do the things brands want them to do.
Speaking of digital carrots…
NFT Repayment Options
Brands can redeem NFTs for concert experiences, meetings, access to content or access to products. But in the future, consumers will have many more options to dispose of their NFTs.
While NFTs are not replaceable, they can still change hands like any other digital asset, and the secondary market for NFTs is still in its infancy. So let’s say Amy, from our cosmetics example, doesn’t really want her own experience with a makeup artist – she can put her NFT on the secondary market and trade it for crypto, cash, or another NFT that offers an experience of comparable value. offers.
“It’s going to open up a world of different options for people,” Jurek said. “Let’s say I was rewarded with a trip to Hawaii through a points program, but I don’t want to go to Hawaii. I can trade it to you for your trip to Belize at a secondary market like Baakt. We’re going to see a lot more peer-to-peer commerce than in the past.
What this means for financial advice
The proliferation of blockchain and digital asset rewards programs has some implications for financial advisors. On the one hand, advisors must be willing to provide advice on how rewards can and should be redeemed, and they must feel comfortable discussing possible trades on a secondary NFT market. Advisors should also be willing to research NFT auctions for a purpose and compare them to other more traditional endowment experiences.
On the other hand, the financial industry may want to adopt some of the behavior-enhancing techniques of the wider brand universe to help educate their customers about better financial behavior. This could be offering “digital carrots” for good savings, spending and investment behavior and offering NFT rewards to loyal customers by giving them access to social experiences.
By embracing consumer rewards focused on digital assets, human advisors can find ways to catch up with the behavioral technology already adopted by digital investing apps like Robinhood and Betterment, and create richer, happier and happier clients.