There’s an age-old problem in business: how do you keep your customers? The answer is to build brand loyalty. This is the constant driver behind most business activities, from marketing campaigns to rewards programs.
But maintaining customers’ interest is getting increasingly difficult. Competition today is rife, with ready substitutes for every product and service, and customers are more willing to jump because switching costs are low. When the product fails to stand out, it all boils down to customer experience. But initiatives like points on a loyalty card won’t cut it anymore.
To come out on top, brands have to elevate their experiences so that their customers cherish them enough to return for more. And as technology advances exponentially, and younger generations become more seamlessly connected, businesses serious about surviving need to take a leap into the future – and enter the metaverse.
Customers are demanding more
We’re all online, a lot. From digital natives to older generations with iPads, today’s customers are digitally savvy. And for the youngest in society, it’s reaching an entirely new level. Not only are they growing up in a digital world, but they are also increasingly interconnected. For them, the online world isn’t just a tool; it’s fast becoming a state of being where the boundaries between the virtual and physical blur as they move seamlessly between the two.
Customers across all audience segments are highly aware of how companies benefit from their data online – and feel used. In fact, some argue that social media websites that make money from user data should actually pay users. While that’s extreme, there’s a growing sense that people want to get something back from all the time they spend online. In a word, they are cynical.
Better management and use of customer data to deliver a more customized and connected customer experience will help to minimize this feeling. When people feel that they are getting something valuable back from sharing their data, such as a tailored customer experience, they are happier to share their information. That’s what UST delivered for the UK’s leading pharmacy and health and beauty chain, Boots.
But as the metaverse and the next generation of the internet in Web3 develops, brands need to take a step further and find ways to create digital experiences that feel new, targeted and tangible.
A verifiable, cross-platform experience
When people think about the metaverse, most imagine virtual reality and immersive experiences. That’s something brands are already tapping into. Take retail. Tools that let you digitally “try on” garments from your home already exist. It’s a step in the right direction for customer experience.
But Web3 – and more specifically, the blockchain technology behind it – could have a big impact on how brands reward customers and how we all live our digital lives.
Most people working with blockchain have been trying to turn customer demand into monetary value through non-fungible tokens (NFTs). But that has largely been fueled by the cryptocurrency crowd with a speculative mentality. Selling NFTs doesn’t help businesses build loyalty among customers who already feel they are being used. Instead, brands must consider how this technology can offer customers an experience they will cherish, not buy.
The capability is certainly there. For example, when someone uses an online tool to gamify their learning, such as the language app Duolingo, they might win a trophy representing an achievement. After leaving the app, they can tell friends about what they’ve done – or even show a photo or screenshot – but no one knows if it's legitimate.
Blockchain technology will remove any doubt. A secure digital ledger, blockchain records ownership and enables people to share verified digital objects across platforms. Gone are the walled gardens. Online users can hold onto their digital rewards and achievements across servers, while demonstrating that they are the official, verified owner – and, most importantly, that they earned and deserved that memento.
A totally new concept of loyalty
What could this mean for business? Over time people will collect objects and souvenirs and create digital archives that reflect their experiences and personalities wherever they are online. This cross-platform capability holds much potential for brands.
Businesses will be able to tap into this new, more connected, authentic digital way of living and offer verifiable digital objects, rewards and even selfies within metaverse experiences that people can keep. This will redefine a customer’s experience of a brand and, in turn, what we mean by brand loyalty. It’s not a paradigm shift – it’s set to be a new concept of loyalty.
UST is already working with businesses in industries such as live sports to find ways to extend and enhance physical experiences in the metaverse in this way. Soon, it’s likely that we will be able to take the stadium experience beyond match day. There will be digital merchandise, a team kit for avatars and the ability to view moment replays from different stands in a digital twin of the stadium.
Privacy poses a problem
Blockchain offers security through proof of ownership, enabling identity verification across social media platforms. Beyond authentication, safeguarding the kudos and pride associated with one’s lifetime of digital accomplishments is a brake on antisocial behavior. Goodbye anonymous trolls. Blockchain will make the internet a safer place where people are held accountable.
But this level of identification and verification poses its own issue: data privacy. If someone can be easily identified online, it won’t be hard for people to track them down in the physical world. This poses a safety risk for those using the internet and we don’t yet have a solution for users to enjoy the benefits of Web3, while maintaining data privacy. UST is working on this question.
Move now – or fall behind
Technology serves today's needs. But in doing that, it also informs tomorrow’s wants as people come to understand what it is capable of. We only need one catalyst to unlock the full potential of the metaverse and Web3. Right now, we’re looking at a powder keg awaiting a spark.
Predicting what that spark will be is not easy. But that doesn’t mean businesses shouldn’t explore and invest in Web3 yet. If brands don’t get to grips with the raw changes happening now, they risk being blindsided by a generation they don't “get”.
Businesses need to start working with technology partners or they will fall behind and lose customers, with little chance of them coming back. And that’s simply bad business.
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