There is no doubt that non-fungible tokens (NFTs) are changing the way that businesses operate. Major brands and businesses are starting to take notice of the opportunities that they present. What people don’t realize is that NFTs offer a new way to tap into under-priced attention and create loyalty among customers. In this guide, I’ll share the four best strategies for using NFTs and provide advice for brands and marketers that are beginning to evaluate a potential NFT strategy for their business.
Learning Phase: Testing the Waters
Introducing new ideas into your business can be more manageable if you test at a smaller scale and create feedback loops. I advise clients to focus their first Web3 exploration should not be seen to be a cash-grab exercise.
A great example of this is Coach; for their first NFT drop, celebrating their 80th anniversary, the brand gave away 10 NFTs that featured characters from their Snow City holiday game for 8 days. Each Coach NFT granted consumers the right to receive a complimentary made-to-order bag. The strategy had a two-fold purpose for Coach: to give back to customers and to learn.
Pepsi did something similar with ‘The Pepsi Mic Drop’ initiative. Inspired by the brand’s roots in music, Pepsi created 1,893 (to mark the year Pepsi was born) unique generative-style NFTs. The collection was made with fans in mind; ensuring that the NFTs were free allowed for inclusivity and accessibility. The collectible series of microphones was not only inspired by Pepsi’s history but also shows an anticipation for the future of the space.
These examples were not focused around making money, but rather as marketing initiatives — projects that would be allocated as a comparatively tiny percentage to their extensive marketing budget. The press and brand kudos alone, was well worth the investment.
Many brands opt to go the charitable route during their experimental Web3 phase. This saves some of the extensive initial due diligence that goes hand in hand with established brands entering a new and unknown space. A great example of this approach is Coca-Cola NFT drop in celebration of International Friendship Day. The collection was designed to drive anticipation and add entertainment value. All proceeds from the NFT auction went to Special Olympics International and raised an impressive $575,883 USD.
The project was well thought out, with utility including a ‘Coca-Cola Bubble Jacket Wearable’ for Decentraland, and a ‘Coca-Cola Friendship Card’ inspired by the original 1940s artwork. Auctioned over 72 hours as a single ‘loot box’, the winning bidder also received an in-real-life, fully stocked Coca-Cola refrigerator.
A great example of partnership is Adidas, the brand unveil a broad Metaverse strategy that partners with some of the hottest names in Metaverse community.. The project encompassed limited-edition drops and scarcity (NFTs granting access to physical products); exclusivity and community (access to Metaverse experiences); and buzzing collaborations (tapping into existing communities with in-built hype).
Partners like Gmoney, Punks Comic and Bored Ape Yacht Club played an important role in helping Adidas enter the metaverse “in a credible way”, says Erika Sneyd-Wykes, vice president of brand communications at Adidas Originals. “There’s definitely a gold rush right now, but we want to be super-thoughtful on how we do it and hold the gate open for folks who are adding value.” Sneyd-Wykes adds that the chosen partners will help Adidas “add to the shared community values” of Web3.
Entering the Web3 space is also a way for brands like Adidas and Nike to remain “cool” with their audience — with Nike acquiring metaverse-centric startup Rtkft. In less than two years, Rtfkt become known as the “Supreme of digital fashion,” selling $90,000 digital sneakers and $3 million worth of NFTs, which sold out in just seven minutes.
The Long Game
NFTs are also brilliant for building long term loyalty — something for brands to lean into overtime. A brand can expect the same loyalty that it demonstrates. The real worth of the majority of NFTs is in the benefit that holders get from ownership. A good example here is Playboy’s inaugural ‘Liquid Summer’ collection that sold out almost instantly. In honour of their founding year, 1953, they created 11,953 ‘Rabbitars,’ a civilization of unique, non-fungible rabbits inspired by Playboy’s iconic bunny logo. These NFTs grant exclusive access to member events, merchandise, and artwork. And going forward, the company plans to keep expanding into the world of NFTs, Blockchain, and Web3.
Playing the long game is a great approach, given that this is new territory for all, there are still many legal implications to be ironed out for large brands.
ADVICE FOR BRANDS ENTERING THE SPACE
So, where do you start?
Align the Business and NFT Project DNA
Ensure that your plans align with your existing strategy. The brands that are established already have an identity, so it’s important that the NFT project is true to who you are. Your current audience should feel like this is just an extension of the brand.
When designing an NFT program, there should be elements of utility*, community, scale, access, and scarcity to drive up the rarity; avoiding projects that are just an ad campaign stuck to an NFT component.
*Utility is the added extras that come from owning an NFT such as access to events, exclusive community or other benefits — see Key Elements of a Successful NFT Project for more on this.
Be Specific With Targeting
Carefully consider who you want to engage in the project; is it the existing crypto community or do you want to start introducing a new audience to Web3? For mainstream brands, it’s a good idea to include some tiered experiences. Tiers can include something that is for everyone, some things for a select few, and then something that could be that rare, very special opportunity.
Clear Marketing Strategy
The foundation of any successful NFT project is community. An amazing collection still needs the necessary exercise of taking the time to build, engage, and convert the community. There must be a heavy investment in community management i.e., moderating responses. Communication is key, aim to provide regular updates and pay close attention to what is being said because the community is a place for mutuality — not just to broadcast, get feedback on what your audience like, dislike and use that insight to power the next iteration of your strategy.
Consider giving your community first dibs on giveaways or timing the launch on the day of an event or festival that matters to the community. Don’t forget to build awareness and create anticipation for the big reveal.
If you have a large enough following or credibility in your market and you’re contemplating your next step, make NFTs a consideration. Even though Web3 is still in the exploration phase, initiatives like ones covered here make digital assets relevant for the foreseeable future. Since Blockchain makes the financialisation of the Internet possible, the opportunities to grow in the space are infinite.
The bright side is that the true impact of Web3 and NFTs will unfold gradually over the next few years, so there’s time to figure the space and your approach out. Remember, your eventual audience is the entirety of your existing and future customers, not just today’s crypto community and there’s a whole host of possibilities waiting for you to get started.
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