Posted: Tue 22nd Mar 2022
NFTs are the new hot topic and, for businesses, not one to ignore. Whether it’s being mentioned by rapper Snoop Dogg or showcased in the metaverse, this new technology has a place among consumers and brands.
But what exactly are they? And how can businesses use them to their full advantage? Read on to learn more.
What is an NFT?
A non-fungible token (NFT) is a one-of-a-kind digital asset that can represent an array of virtual and physical things. It allows an artist or business owner to create a unique version of a digital asset which they can then sell or transfer. As with a celebrity autograph or a rare piece of art, the more people who are interested in an NFT, the more its value increases.
NFTs can't be duplicated as they are created on a blockchain, meaning they can always be tracked back to the original owner.
Because you can only ever have one type of NFT, the technology plays into three key areas of human psychology:
Fear of missing out (‘FOMO’)
NFTs are scarce and humans like to collect things, which means you could be missing a trick when it comes to leveraging these assets in your own business.
Looking ahead a few years, NFTs could be the primary digital touchpoint between brands and their consumers — and one that is controlled by the brand itself.
How can you use NFTs in your own business?
Artists across the world have already found massive success using NFTs to connect with ‘fans’, so how can businesses follow suit?
Generation Z are more dependent on digital media and this is why NFT technology has spread so rapidly, especially within the retail and education sectors.
Below are five ways to use NFT technology to grow your business and retain customers.
1. Customer loyalty programme
In theory, a great idea. However, they are slightly outdated and losing their appeal. According to a study by CFI Group and Radial, 38% of consumers aren’t interested in joining loyalty programmes, because they think the value isn't worth their time.
Loyalty programmes still have a place but maybe it’s time for a refresh?
You could create a digital NFT loyalty card that a user can download to their mobile device once they've signed up to your product or service. Every time they log in or visit your website, they could scan their loyalty NFT card to build up points. Once they hit a certain number of points, you can push rewards, discounts or more tokens to be used in store.
Current customer loyalty programmes tend to benefit the company more than the customer.
NFTs on the other hand will involve the customer a lot more, as they become part of the journey.
Kings of Leon were the first band to release an album as an NFT. The tokens included with the album purchase
, unlocked special perks, such as limited-edition vinyl records or front-row concert seats.
2. Secure crowdfunding
Different to traditional funding sources such as business grants, angel investment or bank loans, crowdfunding is when a business owner showcases their idea to a group of people who are willing to invest in it. This all happens on a dedicated crowdfunding platform that brings the parties together.
Crowdfunding is setup nicely to incorporate NFTs – in fact, there are already several NFT crowdfunding platforms you can get started on. You can launch a product immediately
, or sell services, rewards or digital art to help kickstart your business.
3. Cause-related marketing and charity support
You may have an ambassador who has a strong following. If so, you could ask them to create a digital piece of artwork and then auction it via NFT platforms such as Opensea, Foundation or Rarible (think of them like Etsy or Ebay).
Do you already have digital creative assets?
Covid:aid is the first UK charity to support people of any age who were affected by the pandemic. The charity auctioned its logo as an NFT over 24 hours and used all the proceeds to fund its activities.
It’s a great example of creating buzz around your product or brand and using NFT
’s creatively to tap into a new audience on new platforms.
4. Creating limited-edition digital products
Fashion companies are leading the way when it comes to incorporating NFT into their sales cycles. Brands such as Louis Vuitton, Dior and Burberry have all demonstrated that NFT and gamification (incorporating elements of game-playing in marketing work or other business activity) can be diverse and applied to different strategic goals.
With the COVID-19 pandemic hitting the high street hard, brands had to pivot to engage with their users.
NFTs allow fashion brands to create unique digital products, and are proving to be just as valuable as limited-edition luxury fashion items.
In 2020, Nike patented shoes called CryptoKicks. The idea is that the consumer can digitally customise and design them so they're buying a unique pair of trainers. Nike could eventually recreate these shoes in the real world, but the consumer would own that unique pair of digital CryptoKicks.
5. Connect your NFT with your brand identity
Most big brands don’t aspire to remain in the business of creating and selling digital art. But connecting your NFT collection to your brand principles is fundamental. Nivea has done this with its non-fungible touch collection, blending the brand message with a philanthropical arm. You can access an NFT for free, but you’re asked to understand more about the message of the campaign.
Start building your own NFT
Creative marketplaces such as Fiverr are populated with NFT artists ready to help you create your first NFT.
Step 1: Pick your digital asset and identify what unique item you could auction or create for your community. It might be artwork on a digital receipt, your logo, a GIF or even a tweet.
Step 2: Choose your blockchain. Once you’ve chosen what you would like to convert, you now need to mint your NFT. Determine your blockchain technology before you get started.
Step 3: Set up your digital wallet and upload cryptocurrency.
Step 5: Upload your file and then you’re ready to mint. The NFT marketplace you select will show you a step-by-step process for doing this.
Step 6: Now you can feature your NFT on your chosen marketing channel. Whether it’s a digital receipt or a crowdfunding investment, it’s time to tell the world.
Get started with a small segment of your audience base. NFTs bring the possibility of highly engaging gamification marketing to small businesses, allowing you to build in customer loyalty and potentially unlock new audiences. With little to lose, your small business may see a boost to its bottom line!