Tokenization Strategy

Institutions must think through the tokenization strategy they’ll use to deploy, complement, or replace current offerings and help them execute against identified objectives.

Options fall along a spectrum of archetypes that vary by technical and regulatory complexity. Without going into too much technical detail. Four archetypes exist:

1. Fungible Points: Financial institutions like SoFi and Venmo have launched crypto rewards credit cards or enabled conversion of points to crypto.
2. Tangential Token Offering: Starbucks Odyssey members can earn NFTs marketed as digital collectible stamps and unlock access to new experiences.
3. On-Chain Loyalty Points: The airline company Emirates leveraged Loyyal to tokenize cross-party transactions on the blockchain.
4. Native Crypto Token: At the far end of the spectrum is a pure Web3 play centered around native crypto tokens that can be rewarded, bought, and traded in currency markets.

Engagement & Rewards

Beyond the traditional rewards proposition consisting of offers and benefits, companies can leverage other engagement tools that have gained traction in the Web3 world. Some use cases include:

Targeted token holder campaigns for holding exclusive NFTs, or collecting a certain number of NFTs/tokens (similar to loyalty tiers).

The use of DAO-like structures to enable the loyalty elitists or a gated subsegment of the customer base to participate in select brand decisions.
The “x-to-earn” model, where companies can gamify experiences, create hurdles and milestones across one or more partners, and reward achievements.

Token Utility

The success of any Web3 loyalty offering will entail pairing utility to issued tokens. The utility spectrum can include:

1. Physical utility involving coupling access to real products & services, such as an NFT that grants access to a redeemable product.
2. Social utility in the form of access to community events, VIP benefits, or exclusive brand voting rights.
3. Digital utility extends privileges and access to the digital world in the form of metaverse events & virtual meetups.

An example utility with an added layer of gamification would be to implement a special event, where a customer collects three rare NFTs, which can be burned/redeemed for 1 exclusive NFT that gives them access to 1-year priority shipping.

Technology Partners

Navigating the Web3 technology landscape is no straightforward feat. Companies must consider several factors when navigating the Web3 technology landscape:

• What blockchain platform or loyalty solutions provider to deploy tokens on.
• Whether to use a public or private blockchain.
• Which Web3 infrastructure provider to leverage.
• What institutional wallet and custody infrastructure to select.

As we conclude this exploration of Web3 Loyalty Programs, it’s clear that the future of customer loyalty is here, and it’s more exciting than ever. By leveraging the cutting-edge capabilities of tokenization, smart contracts, and NFTs, your brand can create captivating experiences that resonate with today’s digital-savvy customers.

Set up your program for the future by embracing the Web3 revolution & transform your loyalty strategy to stay ahead of the curve. Don’t miss out on this extraordinary opportunity to elevate your brand’s loyalty program to new heights.