When loyalty marketing meets web3: rewarding ‘brand valuable’ behavior
Since the announcement of the demise of third party cookies, marketers have been desperately trying to build first-party relationships with their customers to offset the loss in targeting precision and campaign performance across the customer journey. Some of the biggest successes have come from adopting modern loyalty techniques to encourage consumers to respond.
According to Lisa Collins, director of customer experience strategy at Oracle, “We need consumers to give us permission to track them on mobile, or to use their email addresses, or phone numbers, or login IDs, so we can stitch together personalized experiences for them in a way that gives them back control. And in order to make this happen, we need to start rewarding customers in ways that are meaningful for them, which is where loyalty comes in.”
Speaking at The Drum’s Digital Transformation Festival in a session entitled 'Loyalty Marketing and the Key to Navigating a Cookieless Future', Collins explains that consumers are fed up with giving over their personal and behavioral data when all they get back is more personalized advertising. Instead, she says, they want to be rewarded for consuming content, for engagement, and for their own creative contribution.
Rewarding ‘brand-valuable’ behavior
Rewarding what Collins calls “brand-valuable behavior” is exactly the point of modern loyalty programs. She cites Budweiser as a great example of a brand using a loyalty program to drive engagement and reward desired behaviors. After you sign up for the Budweiser MyCooler rewards program, the brand starts to collect data across multiple channels.
“For instance, once you’ve made a purchase, you can upload your receipts to get points, and that way the brand can capture and understand more about where customers are purchasing or consuming the product,” Collins explains. “[The brand] also runs surveys to collect customer information and preferences, like learning about your favorite NBA team or musicians, for instance, and customers earn points for answering these.”
Loyalty meets web3
According to Collins, the next step from this is to use web3 technologies such as crypto-currencies, blockchain and NFTs. These allow brands to reward their customers for brand-valuable behavior in entirely new ways. Collins gives the example of Adidas’ tie-up with the Bored Ape Yacht Club NFT collection.
“Adidas is no stranger to encouraging streetwear enthusiasts to compete to get limited-run product drops. When Adidas dropped its first NFTs in conjunction with Bored Ape Yacht Club, it made $22m in under two minutes,” she says.
“At a mint price of 0.2 Ethereum (about $800), holders of the NFT gained access to two key benefits. Firstly, real world exclusive merchandise like a limited edition tracksuit, but also digital merchandise like more NFTs, access codes for future sneaker drops, parties in the metaverse, and opportunities to make money from their own digital creations.”
Tools that build trust
The good news for marketers looking to deepen their first-party connections, Collins says, is that consumers really want brands to respect them by building trust.
“Research has consistently shown that people are willing to share data, they’re willing to respond to marketing activities and, actually, once you get to know them better, they expect deeper personalization,” she says. “But in order to get that initial response, firms must first improve perceptions of privacy, and use data in ways that are contextual, authentic, and empathetic.”
That means three things: brands need to use modern loyalty strategies to continue to not only build relationships with customers, but to reward brand valuable behavior that helps build trust and enrich first party data stores. Secondly, they need to learn from their peers who are successfully experimenting in the crypto space to create exciting experiences that make it worth people’s time to engage. And lastly, they should be aware of how modern loyalty marketers are focused on nudging brand-valuable behaviors, a technique other brands can use to encourage the development of consensual first-party data insight to fill the void left by the demise of the third-party cookie.