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Editor’s note: This is the first in a three-part series on what brands should do before entering Web3.
The short history of brand marketing in Web3 is not an auspicious one. While some projects have produced immense success, most have been total flops. Take the case of Warner Bros. and Nifty’s, which partnered to launch Matrix avatar NFTs in December 2021. The launch was, to put it mildly, glitchy: site crashes, failed purchases and confusing rules. Community members—some of whom waited in faulty lines for more than a day only to wind up empty-handed—were understandably furious. While Nifty’s responded with great communication and a free “glitch in the Matrix” NFT, its rough start should encourage other brands to think deeply about their own Web3 plans.
Against this backdrop, how should brands proceed as we look ahead to 2023? We’ve worked with some of the leading minds in the brand marketing ecosystem to identify the most important factors brands should consider before entering Web3. Topping the list was customer experience.
To be sure, Web3 has been a pretty bad experience to date. If marketers plan to build in this space, they have to keep the customer experience front and center. That means the entire customer journey, not just a single moment on it. Based on our work, we identified four imperatives to create exemplary customer experience in Web3.
Make it easy
As an initial step, brand marketers should focus on ensuring an easy experience to earn consumers’ trust in several key ways:
- Allow for payment with both fiat and crypto.
- Allow for purchase with and without a crypto wallet.
- Ask for email addresses—most people will give them. If you’re not collecting emails, clearly state where you will post updates and where they can go to ask questions.
- Follow up via email post-purchase, explaining benefits and how to activate them.
- Ensure there is a way for customers to get support and that those agents are trained to answer crypto-related questions.
Consider custodial wallets. Most consumers don’t have their own wallet, so you need to give them one. If you choose a custodial wallet, make sure you support them if issues arise. Also consider which methods of payments you will accept.
If you’re looking to sell to your existing market, it’s likely consumers will use fiat currency rather than crypto. You’ll need to ensure you have a solution that allows for that. You’ll need to have clear channels of communication for service. Train your service team on the new product and how to service products before you sell them.
Finally, be sure you deliver on your promises. Many projects have large roadmaps with big milestones. Your roadmap’s size doesn’t matter—what matters is whether you deliver on it.
Think beyond commercial projects
The new technical landscape has caused a major stir, especially since the radical sums of money and the opportunities they have generated are often confusing for brands, consumers and the market. Protocols are valued in the trillions, while single NFTs are selling for amounts in the millions. Despite the massive revenue windfall these projects have created, not all projects need to be commercial. While the majority of brands look at NFTs as a source of quick profit, they can be given to fans as part of an experience they purchase.
Free NFTs can also have a significant effect for brands as a data play, rather than treating NFTs solely as a commercial opportunity. Each NFT must be held in a wallet, which means the brand will have access to wallet IDs. Wallet IDs, in turn, will allow brands to see associated metadata, such as other purchases, social graphs and more. As we move into a post-cookie world, the data consumers carry in their wallets will become a reliable and verifiable source of first-party data that can be used to power brand experiences.
Don’t discount product-market fit
The market for digital goods is small yet diverse, and it follows many of the same dynamics of any other market. For a product to thrive, there must be a solid product-market fit.
To ensure just the right fit, start with the end customer and work backwards into a strategy. Your product and go-to-market methods will vary greatly if your target customer is a well-versed Web3 participant or a general customer who is not a technologist. Both are served by Web3, but in quite different ways.
Web3 natives, for example, value the technology. These participants want to buy NFTs, join Discord communities and take an active role in Web3 development. They want the financial gain and ownership possibilities, but they also want to work with a brand to create the future. A general customer might simply want to buy a virtual good they can wear in a metaverse, own a piece of art or show off a digital collectible.
There is a lot of talk about Web3 primitives, or core foundations of the movement, but general consumers do not care about these. Brands must use Web3 technology to create a product, service or experience that consumers want, need or desire. It’s not enough to simply draw on a piece of paper, call it an “NFT” and sell it.
Ellen Degeneres launched a collection of NFTs in which 68 total units were sold—in a market where most projects were selling thousands in seconds. The difference was that her NFT collection had no obvious value for potential buyers. In comparison, the other projects had clear roadmaps, vibrant communities and were more than just a jpeg.
Many brands are approaching the idea of product-market fit from a different angle and bringing their customers along the journey with them. This provides an enormous advantage over previous web approaches because, by working with their customers from the start, brands can leverage customers to help create and market the product, provide co-ownership to those customers as payment and ensure that there is a product fit for the market. Brands from Adidas to Gucci are using Discord communities to listen to and get product direction from their super fans, while Web3-native brands like BFF and CPGClub are working with their communities to create brand new consumer products. This new approach makes traditional focus groups—often used to gain similar data—as obsolete as a payphone.
You don’t necessarily have to build a community
Community, collaboration and co-ownership are key elements of the Web3 ethos. This ethos often shows up in Discord communities where a mix of builders, super fans and regular customers converge. Communities are powerful, and working with them to collaborate and co-build your project can be critical for its success. However, there are some caveats to consider.
Building and maintaining a Web3 community is hard, costly and time-consuming. Communities are always on and require significant investment in moderation and setup. However, not all projects require a community. Projects like Tiffany’s NFTiff, for example, simply extend the value of other communities through collaboration, rather than creating an entirely new community. This over-the-top utility allows a brand to leverage an existing community for mutual gain; for many brands, collaboration is an ideal strategy, as it removes the cost of owning and managing a community.
In the case of NFTiff, Tiffany’s didn’t create a new NFT project; instead, it added value to an existing CryptoPunks NFT project. The NFTiff was only offered to CryptoPunk NFT holders, allowing Tiffany’s to create a custom piece of jewelry based on holders’ “punk,” or avatar. Its collection of 250 items sold out and netted the brand over $12 million—without investing time, energy and resources into building and maintaining an entirely new community.
Just as airlines extend the value of military service by giving service members early access to board flights, brands can extend the value of communities in similar ways. You can grant special access, privileges and discounts to projects as a way to engage those communities and add value. One way to think of it is this: A project is just another touch point in a broader consumer ecosystem that could drive brand value.
Brands can also simply buy into communities to become a part of an existing project or join a community rather than build one. If you decide your project needs a community, ensure you budget for staff and technology and have a plan in place for how you want to use them.
