Why businesses turn to NFTs to drive engagement

Why turn to NFTs?

Innovation is critical for leading brands to sustain their market positions, and for evolving brands racing to be on the top.

In an age of fickle customer loyalty, it is imperative for brands to explore new channels to engage with their customers, fans, and their employees.

That brings us to the latest fad—NFTs.

NFTs offer a unique channel to deepen engagement with multiple stakeholders in an enterprise’s ecosystem. They can be a digital variant of a physical item or a digital item that is either limited edition (one of many) or exclusive (one of a kind); for example, digital versions of a priceless painting such as the Mona Lisa along with a certificate from the Louvre Museum or a trendy digital sneaker from a famous sports brand or an exclusive virtual evening gown from a leading fashion house. As unique entries on the blockchain, NFTs are permanent and immutable, but can be owned and traded on a marketplace.

Top of the popularity chart

NFTs are rapidly gaining popularity due to several reasons.

In many cases, NFT owners get physical mementos, community membership, privilege passes to events, or exclusive deals, offers, or promotions, which is considered a matter of pride. As fractionalized investments, NFTs make rare and expensive artwork or memorabilia accessible and affordable.

NFTs of promising assets such as rising sports personalities and artists appreciate over time and yield significant returns, making them attractive investment options. This is similar to investment in penny stocks that grows multi-fold as the stocks grow and become blue-chip.

NFTs also hold significant potential for use cases that do not involve trading, such as credentialing of students by academia and learning institutes for employers and venture capitalists; digital passports authenticating product information such as organically grown raw materials, sustainable manufacturing practices, and reusable or recyclable packaging from manufacturers and retailers; and establishing ownership of assets such as vehicles, property, art, or jewelry.

For enterprises, NFTs deepen customer engagement, provide access to previously untapped or under-tapped customer segments, build a brand image and brand recall, and generate new revenue streams from the customers and other stakeholders in the ecosystem.

A new wave—experts advise caution

Having said this, NFT technology is fairly recent.

Most enterprises are in the early stages of comprehending the potential of NFTs to their industry in general and to their organization in particular. Lawmakers are in the process of framing regulations and policies to prevent fraud and ensure consumer safety. Financial experts are exploring the implications of crypto payments on the economy.

Creating a magnetic experience using NFTs requires more than just technology. To keep succeeding at their NFT initiatives, brands need to understand how NFTs can add value to their brand and visualize their NFT journey.

What next?

A discovery exercise is uniquely designed for this purpose, and covers the following: 

Education: Creating awareness across stakeholders about what NFTs comprise, possibilities, industry applications, and peer and competitor initiatives.

Research: Primary research can be done through surveys, interviews, shadow techniques, and more, and the results would help validate the findings of secondary research—publicly available data.

Ideation: Including design thinking workshops with participation across stakeholders to arrive at the use cases that are most relevant to the enterprise.

Prioritization: Picking the most beneficial use cases based on the business impact and the feasibility to arrive at the desirable results.

Roadmap: Outlining a phase-wise adoption of NFTs across businesses, products, markets, and customer segments.

An optional part of the discovery stage is also substantiating the hypotheses through a rapid prototype or a minimum viable product.

After the discovery stage and before building the solution, it is important to consider the legal, financial, and regulatory implications in the operating geography. For example, if crypto currency is not a legal tender in certain countries, it is important to identify a third party that accepts payments in fiat currency, converts them into crypto currency, and vice versa. Explicit permissions must be taken from owners of digital and physical assets to avoid intellectual property infringement. Similarly, counterfeits must be detected to prevent fraud and resulting lawsuits.

Once these aspects are addressed, it is important to bring together the best creative and marketing talent to create an engaging experience and amplify it through initiatives such as community, extended reality, rewards, and benefits.

It is equally important to select the right technology platform. Out-of-the-box features for content storage, token minting, sale and servicing, custody, and marketplace accelerate time-to-market. A cloud-native, microservices-ready architecture aligns well with an organization’s cloud-first strategy. Options for both SaaS and on-prem models provide the flexibility to align and integrate with existing investments. Integration options with visualization tools such as metaverse make the solution future-ready. 

Last but not the least, instead of doing everything within the enterprise, onboard the right partners and launch your NFT journey today.