Customer acquisition costs are increasing for the brands, and they are finding it difficult to offset these costs. Harnessing loyalty and increasing the lifetime value of their customers is the best way to do this, and many of the brands are doing this through a tier-based rewards system. The more purchases a customer makes, the more rewards they receive and attain a certain level in the loyalty program of the brand.
With NFT-focused loyalty programs, brands can not only incentivize their customers and rank up to a new level in the program, but customers can also resell their NFTs when their value appreciates. This adds more value for the customer, thereby making their association with the brand more fruitful. From the brand's perspective, they can take a royalty each time the NFT is resold. Thus, creating a win-win for both brands and customers.
These added advantages are expected to make NFT-based loyalty programs more mainstream from the short to medium-term perspective. Notably, the trend has already started to emerge in the global loyalty program space. For instance,
Consequently, over the next few years, more and more brands are expected to turn to NFT loyalty programs to drive value for customers as well as for their businesses. To tap into a potentially lucrative space, innovative startups are also emerging to help brands replace their existing loyalty programs with NFT-powered memberships. For instance,
NFT-powered loyalty and rewards programs can potentially become a powerful tool for small brands that are seeking to generate brand loyalty among consumers while targeting higher conversion rates and revenue. Furthermore, such a loyalty and rewards program also gives them a competitive advantage over cash-rich brands that are spending millions of dollars on customer acquisition. Consequently, TechInsight360 expects smaller brands to adopt NFT-powered loyalty programs at a rapid rate over the next three to four years.
On the consumer side, the new Web3 experience and NFT-based loyalty program appear captivating, thereby allowing brands to better engage their customers in an immersive experience.
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