Spatial Awareness
Spatial Awareness Podcast
Podcast: Brand Loyalty in web3 with

Podcast: Brand Loyalty in web3 with

Flaunt is a next generation loyalty marketing platform powered by web3. In this episode we dive into loyalty use-cases and the state of NFT and metaverse usage by brands in 2022.

Excerpts from this episode:

Q&A with Flaunt and Chris

Flaunt: You have written in great depth about some of the early brands to launch web3 or NFT strategies. Among the brands who’ve made the leap, who are a few that you believe have done the best job? What are the common threads between their approaches?

Chris: If I had to name some brands more broadly, I would go with Adidas, Liquid Death, Gucci, Off Limits Cereal, and Disney.

Common threads include:

  • Partnering with web3 native artists and creators to deliver something people actually want to engage with, own, and collect

  • Emphasis on creating an engaging community online. Engagement is difficult, especially in our attention-economy. Every brand wants a piece of the pie. Every single company that has a consumer-facing product is vying for your attention. The best communities online deliver value so undeniable that NFT ownership is a no-brainer.

    • Liquid Death: Active community online, stable floor price of initial PFPs, regular community updates and weekly events in Discord, as well as tangible discounts and exclusives available through their token-gated merchandise portal powered by Shopify and Novel protocol. Ownership and buy-in to their loyalty program is a no-brainer. You save money, get access to exclusive events, and it’s fun.

    • Other brands are doing permutations of this, but I like the Liquid Death example because of the approachable and reasonable price point and regular value being offered within the program. It’s the perfect example of what to do.

    • Brands that fail at this usually have a serious lack of utility offerings and struggle to keep engagement of their community beyond vapid GM/GN discord channels and infrequent updates, or utility that is focused solely on one particular thing (like a Decentraland store or a proprietary metaverse that is largely dead). Consumers don’t want to engage in an advertising-centric metaverse, they want to have fun online, participate, feel heard, and truly feel like their time is being well spent.

    • Nike understands this, which is why Nikeland is built in Roblox instead of some sort of proprietary metaverse.

Flaunt: You wrote an article on your Substack back in August about how brands can use NFTs to unlock new experiences and create loyalty. In the article, you talked about the concept of “token-gating.” Can you briefly explain what token gating means and why it’s both unique and value-creating for both brands and consumers alike?

Chris: Simply put, token-gating can take an otherwise ambiguous NFT and use it to access an exclusive area, content, physical products, or whatever else can be dreamt up. It turns an NFT into a multi-pronged tool that can be a ticket, key, coupon, membership, or perk.

Token-Gating can allow NFTs to do the following:

  • Act as tickets (certain people can access an event)

  • Act as keys (certain people can unlock something)

  • Act as coupons (certain people can get % off a product)

  • Act as memberships (access into a community)

  • Access to certain communication channels (Huddle01 or token-gated Zoom)

  • Access to certain products in online stores (traditional token-gated commerce)

  • Access to in-person events (retail stores, concerts, pop-up events)

  • Access to virtual events

  • Access to airdrops

  • Access to future NFT releases

  • Access to certain online meetings (think DAOs)

It’s unique and value-creating because it is multi-pronged, and can be adapted to countless use-cases and scenarios. The same NFT that can be used as a profile picture can also be a ticket into an event, or can offer a customer a % off every order through a token-gated Shopify site. If you can think of a place where you’d normally need to login or show or prove something, an NFT can be used in its place. Timed NFTs as yearly memberships is also an idea that is being floated around and experimented with, so I advise people listening to check out Unlock Protocol to learn more about timed NFTs and memberships.

Flaunt: In the loyalty marketing world, you typically hear about the two types of loyalty: “rational” and “emotional.” You cite the “five commitment dimensions” in this article as well, which in my estimation ladders up to these two buckets. Can you share a little more about these commitment dimensions, and what is it about NFTs that unlocks new opportunities for brands to create both rational and emotional loyalty that isn’t possible in traditional loyalty programs?

Chris: The whole idea around the commitment-loyalty model of customer loyalty is that customers with higher commitment towards a brand will also be more loyal.

The five commitment dimensions include:

  • Affective commitment: underlying experience of feeling, desire-based attachment (FOMO events that are emotional, Tinder Gold, anything purchased with strong emotions tied to the purchase, a Tesla might be a good example, you don’t need the car but people become strangely attached to their vehicles due to the aesthetics and perceived social value)

  • Normative commitment: standards and norms, especially of behavior (drinking is a great example, fashion in some sense might be another, trying to fit in, trying to be perceived as normal, going and doing things, having a sense of obligation to do something (go into work, call your mother, going to workout with your friend)

  • Economic commitment: purely commitment from an economic perspective (medical insurance is a good example, you don’t absolutely need it but you’d be in a worse off place by not having it)

  • Forced commitment: you have to buy this, or you have to buy a similar product (electricity and internet is a good example, you pretty much need it to live in our society)

  • Habitual commitment: routine or subconscious, addictive, ties into normative (certain foods, a Netflix subscription, getting a pedicure, buying vape pens, alcohol)

These commitment dimensions tie into the types of loyalty programs that are built out by companies. NFTs are relevant in this case because they can be utilized for every single type of loyalty program. What might be formerly offered as a fragmented set of value to a consumer can be rolled-up into a single NFT-offering. NFTs have broad potential to create an expanded, shared-ownership model for loyalty, the offering of unique experiences, community building, storytelling, and customer engagement.

The Types of Loyalty Programs

  • Points Program - You accumulate points and can use them for perks or product

  • Tier Program - ranked program, earning more rewards by buying more and engaging

  • Value Program - donating % of sales profit to a societal cause (philanthropy)

  • Paid Program - you pay for benefits (think Instacart and free delivery)

Why do customers join loyalty programs and how does it apply to using NFTs?

  • To earn rewards on everyday purchases (Starbucks Odyssey is going to be pioneering this idea with their new program)

  • To have early access to sales or exclusive merchandise (gated access using NFTs)

  • To have a stress-free experience and/or make life easier (early access or faster shipping using NFTs in checkout or in a reoccurring subscription) 

  • To save money (discount at checkout using NFT token-gating)

Flaunt: Let’s flash forward to the end of next year (2023) - what role are NFTs and the metaverse playing in loyalty marketing? What about in another 5 years?

Chris: NFTs in many circles have become synonymous with scams, cash grabs, and fraud. Understand that the sentiment here may oscillate, and many of the web3 primitives people talk about (like soul-bound tokens, physically backed tokens, and non fungible tokens) may end up as the backbone for Ethereum-based loyalty services in the near future. As market conditions normalize and the market self-corrects from the bull market last year, we will see increasingly sophisticated and genuinely unique NFT and metaverse projects spring up. This is the time for creators and thinkers to build bulletproof solutions and ideas.

Next 5 years:

  • Brands will increasingly meet consumers where they are: online. E-sports is massive, so expect to see more brand partnerships with video game companies. The changes that will inevitably come with VR will create another immersive landscape for brands to build in and potentially increase loyalty. Being keenly aware of where consumers are already spending their time is key. Be willing to adapt and have an open mind for the changes that will come in the 2020s for entertainment.

  • Discord and tools like Discord (a cross between chatting and forums) will become increasingly utilized by brands and by consumers. There will be more of a push away from traditional social media, and ideally a push towards tools that we’ve seen on the horizon, like Jack Dorsey’s Bluesky project, Farcaster (an alternative to Twitter), and other open-source decentralized protocols, like Lens Protocol.

  • Consumers may begin to value and see their participation within social media as something they’d like to be compensated for. The value of consumer data is massive. We may see increased awareness of the cons associated with traditional web2 data management, and a push towards new apps that simply become more popular because they’re better. Change won’t happen unless the applications and networks are genuinely better and there’s an extreme dislike of how things are operating.

  • Transferable user profiles that consumers can take anywhere may become popular. I spoke about SIWE (Sign-In-With Ethereum) in one of my latest articles, and I think that’s a place where companies could grow with each other (as in, using other companies' NFTs as a coupon on your website).

  • Adoption in crypto will continue to increase, but even 5 years from now not everyone will have a wallet. The biggest drivers for NFTs being more widely adopted is simply ease of use and the rationale for interacting with decentralized protocols. If there isn’t a really good reason, it isn’t happening.

  • Brands are going to be advertising in nascent metaverses and promoting themselves within those metaverses, not creating their own metaverses. With that said, a true ‘metaverse’ will likely not exist in the capacity we often idyllically think about in the next 5 years. More likely, games will continue to become massively multiplayer, and changes within the extended reality landscape will grow along with networking changes and the increasing adoption of fiber and lower latency video gaming. 

  • Consumers don’t want to spend time in Coca-Cola land, they’d much rather have cool swag within a game (scan a coke, get wearables in Fortnite, etc).

    Flaunt: What are some general pieces of advice you’d impart on brands thinking about how to get started with web3?

    Chris: Absolutely. Here are some pieces of advice:

  • Partner with smart people who know more than you do about the current web3 landscape, but don’t compromise on what you believe to be your company's core values, especially when it comes to a consumer experience.

  • Spend some time engaging on Twitter and Discord. Join Discord servers for brands you might seek to emulate or learn from. Really get your hands dirty and understand why people are engaging the way they are. Think like a child, have an open mind, and find crypto news sites you trust and build up your general understanding of where decentralized finance and loyalty based around a web3 ecosystem is going.

  • The most original, interesting, and bizarre marketing ideas and concepts are ultimately the ones that make the headlines. Seek to be truly original, but don’t just do it for the headline. Do it to genuinely offer something incredibly cool and unique to your customers.

  • Think in terms of 5-10 years, not 1-2 years. Build out a loyalty program that is extensible, fun to engage in, and has the ability to grow with your business. Don’t build the loyalty program for your current company, build it for your current company and where you think you’ll be in 5 years.

  • Be willing to try new things and explore new ways to engage with people. Not everyone is going to be interested in joining a Discord server (or even know what it is for that matter) but engagement looks different for every brand. Not every brand needs to have an active Discord.

  • Lastly, talk to me and read my newsletter Add me on LinkedIn, add me on Discord.

Thanks for listening and reading! We’ll be back soon with more.

Need help with your web3 go-to-market strategy? Eager to dive into web3 and NFTs, but not sure how to approach it? Reach out to and schedule a chat with one of our experts!

Spatial Awareness
Spatial Awareness Podcast
Spatial Awareness is a newsletter that focuses on web3, spatial web, and how brands, culture, and technology intermingle to make the future happen.
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Chris Sotraidis