This post is the final one in a three-blog series on simplifying NFTs for the uninitiated.
The previous blogs gave a basic understanding of the world of NFTs and how they can potentially apply to our daily lives in the very near future.
Now, let’s examine a few ways that brands can leverage NFTs to connect and engage with their audiences.
Disclaimer: This is NOT investment advice. This is NOT definitive and open to challenge by experts.
DELIVERING BRAND EXPERIENCE
Brands, today, have few options for direct consumer engagement at scale, outside of the social media platforms. And customers are increasingly choosing to engage with brands even before making the purchase.
By issuing NFTs, a brand can create a forum of engagement for customers across the consumer journey and augment their experiences independent of a third-party platform.
While owning the NFTs of a brand by itself gives the owners exclusivity, it is important for Brands to not slip into the "collectibles" space. Brands must look to provide greater utility by delivering well-rounded experiences and special privileges to NFT owners to slowly can build on the exclusivity.
For Instance, Mahindra Thar recently auctioned NFTs, the proceeds of which went towards education of under-privileged girl children. They also gave the NFT buyers an opportunity to experience the Thar in one of Mahindra's off-roading tracks.
Using NFTs, every brand can create a cohort of super fans, a concept, currently reserved for the mega brands.
If one were to draw from Kevin Kelly's "1,000 True Fans" essay, brands don't have to be 'MEGA' to have super fans. Even small businesses can build relatable and powerful brands with a small cohort of ardent followers, a group that remains largely unidentified by most brand owners today. NFTs can give brands direct access to their existing and potential super fans.
CONSUMER RESEARCH
Almost all big companies invest a lot in market and consumer research before they launch a new product. Yet, 80% of the innovations fail. Clearly there is room for improvement.
Even the most sophisticated research models don't and can't recreate the actual brands experience in the context of the customer's life.
By letting customers experience the brand even before "consuming" it, NFT owners serve as a base of potential customers readily available for a variety of experience testing. And, who better to test your brand with, than those who have invested in the experience already?
I for one, think the confidence level in NFT owner feedback will be way higher than that of traditional market research methods.
BRAND BAROMETER
Despite the growth of marketing opportunities in digital media, data availability is highly restricted by the platforms. Most businesses struggle to measure brand salience and therefore spend money where it is easier to justify - in conversion campaigns.
While this helps measurability in the short-term, it dissuades marketers from brand-building, leading to a net value erosion for brands and by extension businesses.
NFTs can enable brands to create and leverage a latent brand equity outside of the traditional purchase cycle.
Minting NFTs and allowing them to be freely traded gives an immediate measure of the value the brand has created in the market.
Businesses have traditionally been built for shareholder value creation. In these times of socially conscious business leadership and B Corps, shareholder value creation is fast being replaced with stakeholder value creation.
NFTs can hasten the transition of businesses from shareholder value focus to stakeholder value focus.
Just like how prospective customers can buy NFTs to help create and sustain brands, they can choose to sell these NFTs for lower prices to demonstrate their displeasure in the brand.
Like how a share price measures Business value, NFT price could measure Brand value.
However, it is in the brands' best Interests to ensure complete transparency in managing and trading of their NFTs, to ensure plausibility of their brand value, until such time that market regulators catchup.
ALTERING BUSINESS MODELS
Another big change NFTs can bring to brands and businesses is in the very model of operation.
In our previous post, we spoke about how art and music and even previously unownable artefacts like GIFs can be minted and owned in parts or whole. This could be extended to every industry, and basically any product or service can be minted.
Say a new business wants the best and most expensive designer in the country to design their brand identity, but they can't afford them yet. The designer can mint the brand identity and lease It to the business. When the business can afford it a few years down the line, they can purchase it outright from the designer. Alternatively, the designer may choose to earn royalty from their creation indefinitely, much in the same way as a music composer who earns royalty from his compositions, which are essentially owned by the music record label.
NFTs could become a new means of crowdfunding.
Say an existing brand wants to develop a new product, but don’t have the required capital. The new product can be minted at its inception stage, and sold to the public, which can solve the money problem. Additionally, the brand can offer exclusive privileges to the early believers, they have a ready consumer base for their market research and can directly and immediately create stakeholder value for their superfans. Everything we’ve discussed In this post earlier.
Conclusion
As we've seen, the possibilities are Immense. NFTs have the potential to disrupt the traditional customer engagement channels. Monetary and soft benefits notwithstanding, NFTs can give brands direct access to those who really matter, paving the way for mindful, purposeful brand building and focus on holistic stakeholder value creation.
