How to Modernize Your Loyalty Program with Digital Assets

Loyalty programs are everywhere. Nearly every brand, from grocery stores to coffee shops to fashion retailers, has one.

In fact, more than 90% of companies offer loyalty programs to entice customers to engage more with their brand.

While these programs are intended to boost customer retention and revenue, many fail to make a real impact. Customers easily forget about them or lose interest in programs that all feel the same. In fact, redemption rates, on average, are below 20% for loyalty rewards.

This is where digital assets come in as a game-changing opportunity to modernize your brand’s loyalty program.

Integrating NFTs doesn’t replace your existing program; it adds an innovative digital layer to make it more exciting and effective.

When done right, adding digital assets to your existing loyalty program can skyrocket engagement in ways traditional programs cannot.

4 Benefits of Digital Assets Within Loyalty Programs

1. Add Gamification to Existing Loyalty Programs

Adding gamification to your loyalty program–i.e., incorporating gaming elements like points, leaderboards, and leveling up– taps into people's natural desires for collecting, competing, and earning rewards. 

For example, you could create special tiers in your program that members reach by accumulating points. They might earn these points by:

• Interacting with your brand on social media.
• Attending in-person events.
• Buying your products.
• And more.

At higher tiers, they might earn exclusive rewards like unique digital artwork or access to special events for your brand. Members will be driven to engage more with your brand to reach the next level and show off their scarce digital assets.

Brands like Lacoste have implemented this by gamifying their web3-based loyalty program. Lacoste created a game called The Mission where users collect and upgrade digital badges by completing brand-related tasks. This turns earning rewards into an immersive, interactive experience.

Overall, adding these gaming elements to your loyalty program taps into people's competitive drive and desire for achievement.

2. Provide Non-Monetary Benefits

Adding digital assets to your loyalty program opens up new possibilities for you to provide members with non-monetary benefits that go beyond discounts or free products, such as:

Exclusive Content Access

Your brand can partner with influencers, athletes, or artists to create NFTs that act as tickets for holders to gain access to gated content. For example, the National Football League launched an NFT ticket stub collection that gave holders access to special in-person events with NFL legends. Brands can add exclusive videos of their own to digital assets, that could include a message from the designer, and more. ethos supports a wide variety of mediums for gated content, click here to learn more. 

Virtual Experiences

Digital assets can unlock virtual experiences like digital meet-and-greets, backstage tours, or interactive brand storytelling. Imagine giving your customers access to an AMA with the CEO and product designers. 

Early Access

Loyalty NFTs can grant early access to new product releases, pre-sales, or limited events. Gucci created Vault NFTs to give holders 1-week exclusive access to purchase items from their 100th anniversary collection before the general public.

These potential non-monetary benefits make earning blockchain-based loyalty rewards prestigious, exciting, and worthwhile.

3. A New Way to Leverage Existing IP

Adding digital assets to your loyalty program enables your brand to re-engage customers using your existing intellectual property.

Disney did this expertly with their “Disney Golden Moments” NFT collection, which featured iconic Disney characters like Mickey Mouse and Elsa from Frozen. These familiar characters were reimagined in 3D gold renderings that Disney’s loyal fans could collect as digital assets.

Your brand could follow Disney's lead and turn your own IP into unique NFTs that loyalty program members can collect and trade. For example:

• A sports team could create limited edition digital assets of memorable plays that fans collect if they show up to enough sporting events.
• A fashion brand could release digital assets of their most iconic runway looks and give them to fans as rewards for attending a live show.
• An entertainment company could give away digital assets of beloved movie characters to fans who go to the sequel’s premiere.

Adding NFTs to your loyalty program allows your brand to tap into the appeal of digital collecting and rarity. Your loyalty program members would be motivated to engage more frequently in hopes of earning exclusive rewards.

It also creates a new way for your brand to monetize existing IP without diluting it. Because NFTs are unique digital assets, they don’t degrade the value of the underlying IP. Overall, incorporating digital assets into loyalty programs is a smart way to drive further engagement while exciting customers.

4. Reduce Customer Acquisition Cost

The core of all loyalty programs is customer retention. But you can’t retain your customers if you don’t find them in the first place.

Contrary to popular belief, digital assets are relatively easy to create and are cost-effective. Although every NFT is a unique asset, you don’t need to design each one differently. NFTs have mostly been used as digital collectibles so far, but the truth is that there are endless possibilities for brands to utilize this emerging technology.

When your brand’s digital asset is packed with benefits like early access to products, promo codes, and other great perks, you are sure to attract new customers that you had not yet seen. 

This approach not only optimizes the process of finding customers—it also results in significant cost savings, making NFTs a compelling tool for streamlining customer acquisition and retention.

Drive Engagement with Digital Assets

Digital assets are not a replacement to traditional loyalty programs, but rather, an interactive and exciting addition. Through NFTs, you can create a dynamic connection with your most passionate customers, offering them unique & exclusive products, services, and experiences. By adding an element of gamification, providing non-monetary benefits, unlocking a new way to leverage existing IP, and reducing your cost of customer acquisition, the time has never been better to incorporate digital assets within your loyalty program. 

Let’s build your branded digital asset campaign today. Connect with us at hello@ethosnft.com.