As an avid coffee drinker, I love Starbuck’s reward system.
If you aren’t familiar with Starbucks Rewards, every time you make a purchase and scan your member barcode (in the Starbucks app), you are rewarded with Starbucks Stars. After collecting so many stars, you can cash in your stars for a reward, like a free drink or breakfast item.
Fun fact: Starbucks Fall Flavors just made their annual debut back onto the menu on August 24th!
I’m sure many of you have favorite reward systems as well — loyalty programs have evolved into fun ways that companies express their gratitude towards loyal customers.
As a marketer, it has been fascinating to see how reward systems continue to evolve, enhancing customer experiences across various industries.
More recently, rewards systems have started utilizing web3 technology.
What is the difference between a web3 loyalty program and a traditional loyalty program?
Although the concept of a web3 loyalty program is the same as a traditional program, the technology behind the two is different. Web3 loyalty programs leverage the unique capabilities of blockchain technology.
Web3 systems can launch NFTs that represent exclusive rewards, enable membership tiers, or even tie real-world experiences to digital assets. Brands using web3 technology have the power to do this based on specific tokens in holders' crypto wallets.
Additionally, web3 approaches have several security advantages over traditional points-based systems — they provide greater transparency, reduce fraud potential, and enable businesses to offer more personalized experiences based on user preferences.
Blockchain loyalty programs incorporate web3 elements to deliver more personalized experiences to the users. Brands can personalize experiences by rewarding customers with NFTs, special membership access to exclusive events or product drops, and redeemable tokenized rewards.
How do brands use NFTS in web3 loyalty programs?
It is quite simple for brands to implement NFTs into their customer’s experience. There are two main strategies in which NFTs are used in web3 loyalty programs:
One of the popular ways we see brands using NFTs is by letting customers buy NFTs to receive exclusive deals.
Oftentimes, brands use this marketing strategy to determine who their most loyal customers are, enabling the brand to know who to reward.
The logic behind this method is that a customer buys an NFT to be a member of the loyalty system.
First, a brand will launch a campaign and allow customers to purchase and mint the NFT. Holding the NFT represents ownership, acting like a key that unlocks special offers. For example, holding specific NFTs might give holders access to limited-time offers or free customer benefits.
One popular example of this is the Friday Beers loyalty program. Friday Beers launched a collection of 5,555 unique avatar NFTs last October. Customers can purchase and hold the NFT in their crypto wallet. The digital asset doubles as an access pass to exclusive discounts, in-real-life and digital events, access to the Almost Friday Sporting Club bar in Nashville, and more. Since the launch of this initiative, the brand has seen more web3 engagement, more revenue, and more participation in their community.
Similarly, Porsche launched a collection of 2,363 NFTs resembling the Porsche 911 car. Luxury car fans raved about this launch because the NFTs gave so much value to the customers — holders are enabled to own a digital asset that represents a timeless and iconic car, access to rewards and exclusive opportunities, digital journeys, and the chance to design their Porsche 911.
There are also many other great examples of how brands are utilizing this web3 marketing strategy — read more about 17 of the Best Brand Activations in Web3.
Also, we have seen brands award NFTs to their loyal customers.
Capitalizing on the endless amount of opportunities in web3, some brands award their loyal customers with free commemorative NFTs to represent the customer’s experience with the brand.
The idea behind this is simple — the same way people love pictures, people appreciate commodities that represent special experiences.
Personally, I would love to see a hotel launch a web3 marketing campaign that rewards customers with NFTs based on the places that customer has visited — imagine how cool would it be to hold a commemorative NFT to represent your favorite destinations and where you have vacationed to.
Prada is a great example of this initiative. Prada ran a promotion in which customers of certain products received an NFT to represent their purchase. For example, when a customer bought the Prada Timecapsule shirt, they received a free NFT that resembled the piece of clothing. This initiative helped create hype around the luxury brand and created personalized experiences for their customers.
What are some real-world examples of web3 loyalty programs?
Web3 is buzzing with new examples of web3 loyalty programs every day.
Blockchain technology also enables other types of tokenized loyalty programs. Web3 rewards can take the form of cryptocurrencies or utility tokens that are earned through engagement with a platform's products or services. Examples include cryptocurrency cashback for online shopping or earning tokens for participating in community governance decisions. These crypto-based reward systems have gained traction for their potential to incentivize user engagement while providing rewards with real value.
Is the future of loyalty programs web3?
Yes — as the popularity of web3 loyalty programs continues to grow, we're likely to see more companies venture into web3 because of the power it gives brands to enhance customer experiences.
Online loyalty programs have been around for some time now but incorporating web3 technologies into these initiatives breathes new life into them.
Web3 technology empowers brands to create real-time rewards for customers, driving higher engagement by providing instant gratification.
Companies looking for cutting-edge ways to engage with their audience, create real-time rewards for customers, and drive higher engagement by providing instant gratification should consider incorporating web3 technologies into their marketing strategy.
Holder is not a web3 loyalty platform, but we partner with the leading web3 loyalty platforms to make loyalty programs even more effective. Explore an entirely new way to reward customers. Contact us to learn more!