Strategies for small businesses using NFTs for brand growth
Credit: Microsoft Designer
The hype around non-fungible tokens (NFTs) has been rumbling away for quite a while now, and initially it was the biggest brands that put the most effort into adopting and using this new tech to their advantage.
Today, there’s no reason for smaller organizations to overlook the opportunities that NFTs offer in terms of audience engagement and customer retention, so here are some strategies to put in place to use them effectively, and some pitfalls to avoid in the process.
Unlocking customer engagement with NFTs
Small businesses can turn to NFTs as a novel way to engage their audience. These digital assets provide a way to offer unique experiences beyond traditional avenues, and with the market poised to top $2.3 billion this year, there’s more than enough momentum to maintain its relevance.
Engagement-focused uses include:
- Art and music: Businesses can create exclusive art or music pieces which are distributed as NFTs, giving customers something tangible.
- Events: Some brands issue NFT tickets for events. Owners gain perks like backstage access or meet-and-greets.
- Personalized experiences: Offering limited-edition items lets consumers feel special and connected.
Basically, NFTs help brands conjure a sense of community, encouraging dialogue between creators and consumers. And interactive elements within NFTs can even allow users to participate in polls or influence product design decisions.
Take the example of Sol3mates, a sneaker-focused sub-brand of Chalhoub Group which was formed with NFTs as its core principle. Holders get access to a community where regular product drops are on offer at special prices, with limited run examples adding an air of exclusivity.
In short, with innovation at its core, using NFTs offers businesses countless ways to captivate audiences and drive engagement.
NFT-based loyalty programs
NFTs open doors to inventive loyalty programs for small businesses. They take traditional points systems and turn them into dynamic, engaging experiences. They can offer:
- Exclusive rewards: Brands issue NFTs granting access to exclusive content or early product releases.
- Tiered memberships: NFT ownership levels offer varying benefits like discounts or premium support.
We first saw a trial of this rolled out by Starbucks, only for the program to be closed a couple of years post-launch. However, this is not the end for the scheme, but rather the start of a transitional phase. And there have been a variety of smaller organizations taking a similar approach, because the scalability of NFTs makes them eminently accessible.
Another selling point is that digital collectibles introduce a sense of gamification to loyalty programs, enticing customers to return and participate more frequently. Loyalty thus becomes an experience tailored uniquely by the business itself.
Because the use of NFTs for loyalty schemes and their wider rollout across the small business sector is always changing, it’s a good idea to keep your ear to the ground via a site like Blockfresh, where you’ll find all the latest news and coverage on Web3 topics. That way you can foresee changes and adapt ahead of time.
Overcoming challenges in the NFT space for SMEs
Entering the NFT realm presents small businesses with hurdles. Thankfully, practical strategies exist to address these challenges.
For instance:
- Understanding technology: SMEs often struggle with blockchain complexities. Partnering with tech-savvy consultants helps ease this learning curve.
- Market volatility: NFTs can experience drastic value fluctuations. Diversifying digital offerings mitigates financial risks.
Another challenge is managing intellectual property rights. Legal experts can guide brands through this, ensuring compliance while also protecting assets.
Security concerns arise as well, and so implementing cybersecurity measures to prevent potential breaches that could compromise customer trust and data integrity is a must. Collaborating with cybersecurity firms enhances defense mechanisms against online threats.
Adapting to regulatory environments also plays a crucial role. Staying updated on global regulations helps avoid unforeseen legal pitfalls.
Tackling these issues head-on lets small businesses unlock NFTs’ potential while minimizing risks associated with this burgeoning market segment.
The bottom line
Growing your brand with NFTs is definitely an idea worth exploring, particularly if what you have to offer audiences is best conveyed via digital content. Of course even brick and mortar companies can thrive with loyalty programs backed by this tech, so there’s more to NFTs than meets the eye.
As long as you’re prepared for the prospective drawbacks that come with adoption, your small business can break new ground here.
