The retail business world is becoming more competitive every year. No wonder companies are focused on customer retention and motivating repeat purchases. Loyalty programs are one way to achieve this goal.
Traditional accumulation points and discount coupons are not effective for all categories of consumers. For example, an innovative approach using fashion technology and personalization is needed to attract the younger generation’s attention.
The most talked-about tool for loyalty programs is NFT (non-exchangeable tokens). These are unique digital assets created on blockchain that users can collect or sell.
Their long-term value lies in the opportunity they provide for brands:
- interact with customers;
- create a community of passionate users who can advocate for the brand.
This is exactly what young consumers want: to have a product experience with brands that share their values. Creating an engaged community is at the core of interacting with Generation Z and Millennials in the new reality of Web3.
The Differences Between Gen Z and Other Generations Brands
The effectiveness of brand building directly depends on engaging with the audience and understanding their tastes, interests, and insights. To sell pizza to a student or their grandmother, you need to know how and where they consume information, what values are important to them, and what defines their worldview.
To achieve this understanding, it is essential to start by segmenting the audience. One way to do this is by drawing upon the generational theory that William Strauss and Neil Howe developed in the 1990s. In marketing, this theory helps us comprehend how people of different ages exhibit distinct behaviors, values, and perspectives when making purchasing decisions.
Generation X (1963 – 1983)
The audience of Generation X prefers “live” stores but is actively mastering online shopping.
To interest “X” in communication, you need to convince them of the superiority of your product over the competition: its uniqueness, durability, convenience, and quality.
The best communication channels are TV, newspapers, magazines, and email newsletters with personalized offers.
Generation Y (1983 – 2003)
Millennials do not like information with “water,” including in advertising texts and creatives. To hook this audience, it’s important to surprise them right away, to attract them with values they share: a healthy lifestyle, appearance, ecology, romance, and spiritual development.
The “Y” generation is no longer as influenced by authority in advertising as the “X” generation. These consumers are more likely to believe their acquaintances than celebrities. That said, they tend to trust honest bloggers.
Before buying, millennials read reviews and compare different offers. But sometimes, they allow themselves spontaneous and emotional decisions if the brand really manages to hook them.
The best channels of communication: Internet platforms, social networks, and interactive advertising.
Generation Z (since 2003)
The “Z’s” are mobile shoppers. Most teenagers shop online using their smartphones. They often buy video games, gadgets, clothes, and accessories online.
Zoomers prefer consuming information across the vast expanses of the internet. They are visually-oriented individuals who enjoy watching videos, including viral ones. That’s why they often purchase products advertised on YouTube or TikTok.
To capture the attention of Generation Z, your product or its advertisement must be original and memorable — something that leaves a lasting impression. It should be compelling enough to make them want to buy the product or service immediately.
The best channels of communication are social networks, messengers, and games.
To get a response from the audience, every company must understand the characteristics of its target generation. Learn to stand out not only with beautiful branding and flashy advertising but also with values close to people.
How NFTs are Shaping the Next Generation of Customer Rewards
NFTs are crucial in shaping loyalty programs for the next generation of customers. They offer brands the opportunity to create unique digital assets that can be used as rewards or privileges for loyal consumers.
Moreover, as part of the blockchain system, NFTs are poised to revolutionize how consumers buy homes, sell cars, share medical information, and more. While tokens are still relatively new and entry barriers to the market are high, they already attract consumer attention and shape the direction of business development.
However, it’s essential to consider that using NFTs in loyalty programs has limitations and is not a one-size-fits-all solution. The effectiveness of this approach depends on the specific business and its target audience. It’s also important to note that the concept of NFTs is relatively new, which means regulation and standardization are still evolving, potentially impacting how customers perceive and engage with them.
Thus, NFTs offer many new opportunities, but their use must be thoughtful and tailored to the specific activity.
Building Emotional Connections and Long-Term Customer Relationships
Loyalty programs are an effective marketing tool for building trusting relationships with customers. They incentivize clients to purchase a specific brand’s products or shop at a particular store. This helps companies increase sales and gradually win over consumers.
NFTs offer several advantages compared to the traditional approach. Firstly, tokens are much harder to counterfeit or duplicate, ensuring their security and reliability. Secondly, NFTs can be customized to meet the specific needs of businesses or clients. This enables enterprises to create loyalty programs tailored to their brand and target audience.
There are a few key points to remember when using NFTs to enhance customer loyalty. You should use NFTs as a complement rather than a replacement for existing loyalty programs. Additionally, NFTs should be user-friendly and easily understood by the intended customers.
Gamifying Loyalty Programs with Digital Collectibles
Gamification of loyalty programs with digital collectibles can be an effective strategy for attracting Generation Z customers.
Ways to gamify loyalty programs:
- Create a series of unique and limited-edition collectible items that customers can receive as rewards. You’ll encourage them to actively participate in the loyalty program.
- Organize the collectible items into levels, with increasing value as customers progress up the loyalty ladder. Buyers will strive to reach higher levels or perform specific actions to obtain valuable collectibles.
- Allow customers to trade digital collectible items on a dedicated platform or within the program’s framework. Trading adds a social dimension to the loyalty program and promotes customer interaction.
- Offer additional bonuses or perks to customers who possess specific collectible items. This enhances the perceived value of the loyalty program and creates a sense of exclusivity for devoted clients.
When developing a gamified loyalty program based on NFTs, consider your brand identity and the appeal of the collections to your target audience.
Regularly assess the program’s effectiveness, gather customer feedback, and make adjustments. This way, you can ensure that it remains engaging and incentivizes purchases while meeting customer expectations.
A Win-Win for Businesses and Customers
To create and launch an NFT-based loyalty program, you can use ready-made solutions like Unikee.
NFT collections open up new opportunities for businesses to make money and promote products/services.
Tokens allow you to:
- provide unique digital experiences for subscribers;
- strengthen customer loyalty to the brand;
- increase customer engagement;
- increase company profitability;
- increase brand awareness.
However, it’s essential to consider that NFTs have limitations and may not suit all business models. Implementing NFTs requires careful research, selecting the appropriate format that aligns with business goals, and a deep understanding of audience needs.