NFT Utility: The Key to Longevity

We've written a lot about many of the "big picture" topics around NFTs. And we have made a lot of mention about utility, and how that's the biggest value unlock for these assets. Now, we want to go in-depth and explain what that means, how it works, and detail some types of utility and how brands can, well . . . use them.

Utility 101

Let's begin at the beginning. What do we mean when we talk about utility? It refers to being able to use an NFT in a way that goes beyond the NFT itself. An NFT can be appreciated solely for its appearance, and that’s how many of these early projects started. Many were programmed images that were randomly generated. The rarer an NFT’s characteristics, the more value it had. Others were unique works created by a true artist. There are many beautiful NFTs that are real works of art and worth appreciating for their imagery alone.

However, given how this space is evolving, it is likely that in the not-too-distant future, NFTs that are used by businesses as a marketing tool will be much less about the image, and more about what they can do or provide for the holder. Not to say that they will not be beautiful, but rather, how an NFT looks will be secondary to what it unlocks.

Utility attaches real-world (or what the kids call "IRL") value in the form of rights, rewards, access, or any combination thereof.  When done well, utility removes the speculative hype and adds real value to the holder. To put it simply, utility is what happens when businesses begin to think of NFTs as more than just images.

Emails, Posts, & Texts . . . Oh My!

Why does this matter? Customers and fans are looking for new ways to engage with the brands they love. Social media and email marketing just aren't cutting it anymore; they’re too focused on selling. Our very full inboxes and noisy social media feeds make us feel like we're being "sold to." And that's a one-way street. 

Brands can no longer successfully get attention in an attention-strapped world by simply pushing their products and services on consumers. Promotional emails are easily lost in a sea of messages. Instagram ads are just a barrier to seeing the next funny video.

And no, it's not the person you like texting you back. It's that company you gave your phone number to in return for a 10% discount in the event you might buy something from them telling you, "THIS NEW PRODUCT IS SELLING FAST!" Even our text messages are fair game for marketers pushing, promoting, and promising that they have something we "can't live without."

It's human nature to want to feel seen and valued, to feel like you're part of something in a meaningful way. Digital assets have the power to offer consumers rewards and a sense of belonging.

Create Value, Curate Loyalty

It’s time to up-level engagement. By using NFTs to give your customers experiences that are unique, memorable, and have value, you can create an emotional connection that will remain long after your last interaction. And that connection is what keeps customers coming back for more, rather than just attending an event or making a purchase.

NFTs can play a big role in cultivating loyalty by creating new and meaningful experiences. Imagine an art museum that drops NFTs that unlock a virtual tour of the current exhibit with a notable artist. Fans of the artist or the museum can view the tour from anywhere in the world, and can even purchase related collectibles or goods. This is an excellent way to engage with a wider audience and reach people who may not be able to make it to the physical location.

Now imagine that this same art museum also has special parties throughout the year. You scan a QR code upon arriving and receive a collectible image designed by an up & coming artist. That image also enters you into a raffle to win original artwork or a tour of the gallery after hours. These are the types of exclusive experiences that turn potential or one-time customers into repeat customers or lifelong fans.

Here’s another scenario: walking into a sports arena to attend the game of a favorite team and being airdropped an NFT. At the very least, you have a cool image as a memento of attending that game. But then something magical happens: your NFT is randomly chosen and you receive a ball signed by the whole team . . . and a jersey! Now you’re even more excited to attend the next home game so you can wear that jersey and get another NFT. Who knows what prizes or experiences future collectibles might unlock?

NFTs + Utility = Up-Leveled Engagement

Being able to use an NFT to unlock value is the key to longevity. The more value that can be unlocked, the more likely people are to continue to engage with your brand. The above are but a few basic examples of using NFTs to create up-leveled engagement. But it's easy to see how this could be done on a much larger scale by any brand that has a large following and/or consumer base.

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 possible to create this utility with no dev time, we can help you figure out what strategies are suitable for your objectives. Contact us today to learn more.