NFTs were the seemingly overnight sensation of 2021. They made splashy headlines and created a wave of hype and speculation that held the potential for quick riches. And then it all came crashing down earlier this year. But that does not mean these assets don't have a future – quite the opposite. Speculation can only last so long. The opportunity for NFTs that connect communities and create real utility is so massive. However, as with anything, they are no silver bullet. What makes NFTs a suitable tool for brands, businesses, and creators?
Ask the Right Questions
It bears repeating that digital wallets will be a prominent form of social identity in the future. In our first ever blog post, we said "right now, if you want to know what someone is like or what values they hold, you go to their social media accounts. In a few years’ time, you’re also going to look at their wallet." It's hard to know exactly how many digital wallets are in use around the world, but as of September 2022, there were almost 85 million unique wallets that had been created through blockchain.com.
That said, we're still early. There was a time when Facebook was just for college students, and not part of the vernacular and permeating so many parts of life. We're sort of there now with web3. There are early adopters who get it, but it's not yet part of the fabric of digital life. NFTs hold infinite possibilities for new forms of engagement. In order to be successful at this early stage, there are certain criteria that, if met, will give you high chances of success.
(Gut) Check Yourself
When we talk to prospective customers, we ask questions in order to clearly understand if they would be a good fit. In other words, do they meet any of the below high-level criteria?
Generally, if a prospect meets at least two of the above, then that's a green light to proceed. NFTs are most effective when there is an intersection of community, excitement, and utility.
Connection + Utility = Value
Why is this so important? As mentioned above, NFTs are not magic, even if the internet might have you believing otherwise. They are not a tool meant for every business and every brand.
An enthusiastic consumer base and/or strong community is key to successfully using NFTs. These digital assets create a sense of ownership. If the people who are buying your products or services are not hyped up about them to begin with, NFTs are not going to make them rally. For example, NFTs probably do not lend themselves well to something like, say, caulk. (No offense to the DIY crowd, though. I see you. 👀) We all have caulk in our homes, but it's not something we get excited about purchasing, right?
On the other hand, your favorite food, beverage, sports team, or entertainer? Those are things that people feel strongly about. We get excited every time we rip open that bag of chips or hear the hiss of opening a soda can. We become repeat purchasers, so they have a high sell-through rate. If the manufacturer comes out with a new product, we're likely to try it. NFTs can incentivize consumer behavior – buy your favorite product x number of times, receive a loyalty NFT, which gets you a freebie of the new product. Maybe it will even become a new favorite! And that utility can evolve over time based on the individual consumer's preferences.
Sports teams are a no-brainer. Fans are extremely invested in the outcomes of games and their favorite players. Kids see their sports idols as heroes. People not only attend games, they buy jerseys and other memorabilia as a show of support and to feel like they are part of the larger fan community. We wrote a blog post dedicated to this topic, so you can delve into further details there.
What about your favorite singer? To the excitement of millions, Rihanna was just announced as the performer for the Super Bowl LVII Halftime Show in 2023. Imagine if her biggest, most loyal fans had NFTs, and several of those holders were selected at random to win tickets to the big game and her performance. There is also an amazing opportunity for Apple Music, the halftime show's new sponsor, to further incentivize people to use their service over archrival Spotify. Apple already tracks user activity; why not reward high engagement with NFTs that give people a chance to win a trip to the Super Bowl? Perhaps the top 1% of listeners for any given artist receive an NFT, which can unlock exclusive access to events or enter them to win high-value prizes, like front-row concert tickets for that artist's tour.
A connected community can be further enhanced with the right NFT engagement strategy. Utility creates new experiences for consumers and takes them on a journey to unlock a whole new world of value. New use cases are only limited by imagination.
Are NFTs right for you? If so, do you want to evolve how you engage with your consumer base? Chainstarters is excited about the possibilities for businesses of all kinds to up their game with this new technology. Not only does our platform make it easy, we can help you figure out what kinds of utilities and strategies are suitable for your objectives. Contact us today to learn more.