What is an NFT?
Before diving deeper into ways to leverage NFTs to grow your business, you’ll want to understand them first. When asking the question ‘what is an NFT’ we typically all get the same reply, ‘well, it’s a non-fungible token’. Okay great…but what does that actually mean and why is that important?
To start with the basics, a fungible item is something that can be replaced, it’s interchangeable. Therefore, being non-fungible essentially means the item is unique and oftentimes one-of-a-kind.
For example, land is non-fungible. It is sellable, yes, and even tradable however, each piece of land has its unique qualities that can drag its value up or down. On the other hand, money is fungible. Two $5 bills, no matter how old or what condition they are in, are both worth $5- they have no unique qualities that affect their value.
So, what makes an NFT non-fungible?
Each NFT has a unique code that is stored with them on the blockchain. So, although some NFTs may look alike, they cannot have replicas due to their unique identification codes and metadata, and they cannot be exchanged at equivalency.
Why were they created?
The artist-first mindset is what inspired the start of the NFT as it allows the creator and/or the original owner to continuously reap the financial benefits after each sale. For example, If I were to purchase a painting from the original artist, they would make a profit on that sale. Then 5 years later the artist becomes well sought-after, so I decided to sell the art for triple its original purchase price, I would be the only one profiting from the sale rather than the original artist. This is what the unique coding and blockchain of NFTs prevents. If I am to resell my NFT to a new owner, the original owner on the blockchain as well as the reseller would benefit in the profit.
So, what are you actually buying when purchasing an NFT?
Technically, you are purchasing a token that is a representation of an item or a digital record of ownership. Currently, NFTs are mostly used to sell "digital collectibles," e.g., digital art, music, online articles, tweets, in-game goods, and collector cards. However, NFTs aren’t just the oddities you see selling for millions in the news, they can be practically anything digital or they can represent real-world items such as artwork and real estate. They can also be sold with Smart Contacts, meaning rules can be applied to the purchase and sale of the asset through their unique codes. But these tokens of ownership have been generating a lot of buzz and have caught the attention of B2C and B2B companies worldwide.
Why are so many major companies jumping on board?
Major industry leaders such as Coach, Verizon, Zillow, Ticketmaster, Spotify, Gucci, and more have harnessed the power of NFTs. These tradable digital records have allowed these brands to break through into new communities and generate global interest. NFTs have opened up new ways of consumer interaction, allowing fans to transform into actual participants of the brand. Additionally, with so many possibilities for what NFTs can represent, they have opened so many new doors for brand storytelling. The NFTs allow brands to create new innovative brand experiences, increase brand awareness, and encourage interaction with potential customers, ultimately NFTs can help you increase conversions and drive revenue.
Let’s get down to business
Now that you have a better grasp of NFTs, you might be thinking about how they could apply to your business. Since the concept of NFT marketing is so varied, we felt the best way to look at it was through examples. Below we have outlined some of the creative ways that major brands have been utilizing NFTs in hopes you can grab some inspiration from them.
Prioritizing your loyalty members
Keeping your current customers as customers is a top priority for many businesses. Using NFTs can be a way to create comradery and exclusivity amongst your leading consumers and continue to generate excitement around your brand. For example, AMC awarded free NFTs to Investor Connect members. Building on the excitement of NFTs encourages current members to maintain their loyalty and it generated new subscriptions from users who are now more aware of the perks and who hope to sign up in time to receive their own NFT. This low-cost and energy-efficient tactic brought their loyalty program into the limelight and even generated income for AMC from users trading and selling the NFT. This approach would work well for any renewal or a subscription-based business. Releasing new NFTs seasonally or annually will encourage customers to keep buying what you sell or, if you’re in a renewal-based business, re-upping their subscription.
Maybe your brand is interested in hosting a giveaway or generating more exposure for your brand. Coach stepped into the NFT world by launching their first NFT collection as a social media giveaway to celebrate their 80th anniversary. They released daily drops of NFTs to their followers, which were redeemable for a custom coach handbag. The company sold out in under one minute and received global press coverage. To take the campaign a step further they released early access to claim an NFT to their insider members in a campaign to highlight some of their most classic bag collections. Again, they saw the NFT sell out in minutes followed by a massive increase in Coach insider signups. But this tactic doesn’t have to remain exclusive to B2C companies. B2B has value to offer their consumers as well such as a free demo, analysis, insider information, etc.
whether your company is in the gaming industry or not, gamification with NFTs can be a great way to generate buzz around your brand. Financial firm PWC creatively used NFTs on a branded marketplace to reward users for participating in activities and demonstrations. To incentivize event completion, those who completed each activity demo were prompted with a QR code for a free redeemable NFT. When downloading the NFT users had to provide their name and email, generating high numbers of new c-Suite contacts as well as an increase in event completions.
Generate buzz around your events
Utilizing NFTs at events can engage your attendees in a whole new way. Leveraging NFT technology will create strong fan communities lasting long after your event. For example, Live Nation used NFTs to deepen their connections with consumers by providing virtual commemorative tickets issued to all concert goers. Their goal was to “bring back the nostalgia of collecting ticket stubs while also giving artists a new tool to deepen that relationship with their fans.” Said CEO Michael Rapino and it did that and more by also creating a community where fans can make connections with one another in support of Live Nation events. Ticketmaster took a similar approach by distributing digital keepsakes for various events and collectibles so fanbases can collect their favorite teams. Corporate events can take a page from their book by offering attendees NFTs that can be used to promote attendance, offer discounts for future events, or as a way to stay in touch with other attendees. Or maybe, you’re selected to speak at a conference. Providing NFTs to everyone who stayed or participated in your session would draw attendees to future events, establish yourself as both unique and cutting edge, and be a great way to collect contact information from the audience for future networking.
Creating an NFT that works for your business
NFTs are extremely versatile and with a little creativity, they can be curated to promote any business goal. They are changing the way organizations create brand experiences. The power of giving ownership to consumers establishes a closer relationship between your customer and your brand. In addition, the buzz around NFTs will raise brand awareness and can quickly draw attention to your products. Web3.0 as a whole has the power to generate massive buzz and foster unique customer engagement that will keep users coming back for more. At this stage, companies that jump into this space could see massive rewards as it's yet to be saturated and organizations are continuing to be praised for their innovation.
If you want to learn more about how you can use web3.0 to your advantage take a look at our page https://www.bostondigital.com/metaverse or connect with us