2. POSSIBLE GAINS OF
APPLYING NFTs TO A
LOYALTY STRATEGY.

3. N.F.what ?

4. NON
TOKEN
FUNGIBLE

5. ITS A DIGITAL FINGERPRINT.
Of a unique digital asset where ownership is
tracked on a blockchain.

6. SO WHY ALL
THE FUSS??

7. BECAUSE THERE IS MORE, WAY MORE.
NFTs can also contain smart contracts, making it possible for a creator to
attach features that expand their purpose. In simple terms, NFTs are
programmable.
● Tokens can function like a loyalty membership card, providing the
member access to exclusive communities, events, special discounts,
or time-based unlocks, amongst a host of additional benefits sent
only to holders. Revenue from initial or secondary NFT sales can be
fed back into the brand.
● Royalties can be programmed into an NFT. Every time the token
changes hands, a portion of the resale value can be attributed to the
creator or any person chosen.

8. THE ICEBREAKER
This could be a new, and
direct method for brands to reward
customer loyalty and build a highly
engaged community.

9. “Crypto and
NFTs are
’100%
based on
greater fool
theory”
JUN 2022

10. I GUESS HISTORY WILL TELL
IF BILL IS RIGHT.
ANYHOW, FACTS TIME.

11. BENEFITS OF NFTS
Unique
Given their non-fungible nature,
NFTs are inherently unique and
limited. They create an air of
exclusivity and mystery because of
their rarity, especially when there
are additional benefits granted by
token ownership.
Experiential value
NFTs are often more about the
experience rather than the product.
People want to be a part of
something new, and they also want to
talk about it. As more complex use
cases develop, the line between the
physical and digital experience will
blur.
Cost-effective
NFTs are relatively easy to create,
so the cost of entry is low. The real
investment is in planning and
committing to a long-term strategy
that suits the brand identity and
developing a marketing platform to
support it.
Hype
There is a lot of excitement around
NFTs, creating opportunities to try
something new and stand out. While
the initial hype cycle may subside,
brands who invest and execute early
can apply their learnings in the long
run.
Long term brand equity
Create a brand with longevity, and
this requires change and leveraging
technology to maintain relevancy.
NFTs provide a new way to access
and reward customers directly,
collaborate with other brands,
support a social purpose and build a
community – all these elements can
encourage consumers to follow and
maintain engagement with a brand in
the long run.

12. CHALLENGES OF NFTS
Execution:
NFT projects must be meaningful and
viewed as such by consumers. Interest
and engagement rely on users seeing
meaningful value, and the original creator
or brand providing genuine utility. Brands
need to commit. If a brand struggles to
find a purpose for digital ownership, the
results will be short-term– and could
even damage the brand.
Volatility:
Cryptocurrency markets are highly
volatile, and the relevant regulatory
frameworks continue to develop.
Dramatic price changes can
significantly impact demand for
NFTs. Due to this inherent risk,
brands must optimise for
engagement rather than pure
monetary value.
Accessibility:
Most blockchain technology at the
moment is not user-friendly, so real
emphasis must be placed on how a
brand can make NFTs more
accessible to their particular
audience. The technology is so new,
making UI/UX a top priority to meet
public demand and interest.
Perpetuity:
There is little to no existing legislation or case
law yet in relation to NFTs. People will
commonly assume that the holder of an NFT is
granted automatic copyright, but the
legislation or treatment of tokens is not so
clear-cut. Intellectual property and copyright
are going to be a major, major source of
challenges in the future.
Sustainability:
The environmental impact of
blockchain technology
continues to be an ongoing
debate. Nonetheless, various
blockchains have very low
carbon emissions, but they do
not yet have the market size of
the majors. Sustainability
remains an important
consideration for any brand
moving into the space as it
will influence adoption and
brand perception.
?

13. ARE WE INTO UNCHARTED
WATERS TRYING TO
INNOVATE THE UNKNOWN?

14. Kind of.
NFTs are struggling in adoption phase, so we just
learned how to sail. Nevertheless, major brands have
already shown interest, naturally targeting the
younger audiences.

15. NBA Top Shots is a digital marketplace where
people can buy short clips of amazing basketball
moments as NFTs.

16. Jimmy Choo created a charity auction for an NFT
depicting a pair of designer sneakers. The winner
also received the real-world counterpart, while
also contributing to a noble cause.

17. Clinique Smart Rewards took added in the
experience an NFT raffle.
Members can enter by sharing inspirational
stories on Instagram, TikTok and Twitter, and the
top three will be rewarded with two of the
brand’s most coveted products and
color-changing NFTs.
● The company introduced this reward as a
limited-time event to inspire customers to act fast
● Access to the event is universal and all members can
participate regardless of their tier, ensuring the
brand reaches the largest possible audience
● Using a raffle format with a handful of winners maintains a
high perceived value of the brand’s crypto art
● The NFT comes packaged with other benefits, chiefly a
fan-favorite product, so people who want more than just
the art are also satisfied
● Using social media contests as an entry requirement
for winning the NFT ensures high participation
rates, and makes the whole experience both fun and
memorable, while driving virality for the brand

18. AMC (AMC Stubs)
AMC partnered with Sony Pictures ahead of the film release of
‘Spider-Man: No Way Home’ by offering around 86,000 NFTs as freebies
to select loyalty members, including those who subscribe to its Stubs
Premiere and A-List programs. AMC plan to airdrop discounts and other
benefits to holders of the new cinema chain NFT – and AMC will collect a
small royalty on all transactions made from the trading of the NFTs.
Burger King (Royal Perks)
As part of the rollout of its Royal Perks loyalty program and continuing
investment into digital platforms, Burger King partnered with NFT
marketplace Sweet on a set-completion game. Customers could scan a
QR code on each meal box to receive one of three collective NFT game
pieces. On completion of the set, customers programmatically received a
fourth NFT reward, which could either be a digital collectible, free
Whopper sandwiches for a year, merchandise or a call with one of the
collaborating artists. Burger King have also dabbled in more simplistic
cryptocurrency giveaways to drive engagement.
Marriott (Marriott Bonvoy)
Marriott Bonvoy launched its own NFTs as part of its ‘Power of Travel’
campaign. The brand partnered with digital artists to allow three lucky
individuals to win one of the NFTs and 200,000 rewards points for
Marriott Bonvoy. The hospitality group aims to continue building a digital
presence with NFTs to engage and incentivise customers and members.
Louis Vuitton
Louis Vuitton celebrated 200 years by launching Louis: The Game.
Players had a chance to receive one of 30 limited edition NFTs. Louis
Vuitton opted to lock the tokens (not for sale) until a future date,
choosing to focus on educating customers on brand values and tap into
the general hype surrounding the technology.

19. Any lessons learned
so far?

20. 1. Keep the experience
non-fungible.
NFTs were never meant to be mass
rewards. Keep your NFTs as
exclusive and high-end as possible
to maintain their uniqueness and
mystique. Furthermore, each NFT
needs to be one-of-a-kind in terms
of design. For a specific campaign,
you can have different color variants,
or have slight alterations, but for the
next time, your design team needs to
come up with an entirely different
concept.
2. Availability impacts the whole
concept.
Decide whether you wish to run NFT
reward campaigns occasionally or
consistently. Limited-time events
should be open to all members, but have
a unique entry condition, or an entry fee
to be paid in loyalty points. If NFTs are
always available, then reserve them as a
thank you gift for reaching the highest,
most exclusive tier or reaching a
difficult milestone, such as being a loyal
customer or subscriber for several
years. They can then keep it or trade it
at one of several popular NFT
marketplaces.
3. Introduce reward bidding to
create a little competition.
Social media contests are one way
to engage a larger audience. But in
an already existing loyalty program
nothing is better than an auction
among members. During each
round people can bid with their
loyalty points, and the person who
offers the most points receives the
NFT.

21. DR HOUSE ADVICE
● Needs to be under your radar.
● Can be used to seriously score innovation points, create positive brand image,
enhance customer engagement and long-term loyalty.
● There is room for opportunities to tie NFTs and Loyalty together. From creating a
collectible piece of brand history, rewarding specific behaviours, to programming
exclusive perks.
● To get into the NFT space, its is necessary to invest the time to understand what
makes a NFT project successful – execution is one thing, but a focus on building
engagement and community is integral.
● Staying relevant has always been the key to brand success, and blockchain products
are “screaming” relevant these days. Their volatility on the other hand may drive
negative impact if value collapses.

22. But most importantly:
NFTs can be another arrow in the quiver to
design the optimum loyalty strategy.

23. THA K YOU!
Harris Kaldis
harris.kaldis@gmail.com Product Director, Verlabs/ EnA platform.