While the democratization of e-commerce infrastructure is making it easier than ever to create a new brand, it also gives consumers more choice than ever. Social media feeds and search result pages have become battlefields, intensifying with new privacy changes from Apple and Meta.

It has never been more expensive for brands to acquire and retain customers. Acquisition costs skyrocketed by 60% over the last decade while customer lifetime value has stagnated.

Loyalty programs are hugely important for brands - after all, 84% of people will choose a brand that has a loyalty program when making a purchase decision. But creating and retaining loyal audiences has always been one of the toughest challenges for any company. Current loyalty programs have most consumers being cynical of their real value due to Points Fatigue, Elusive Tier Status, and an overall, distrust of the mechanics. Only 37% say that the points and tier are an effective tactic to retain their loyalty.

So how do we get people excited about loyalty programs? How do we make sure the rewards are really relevant to each individual member? How do we make people feel valued as individuals and not just as numbers within the program? This is where Web3.0 comes in.

Blockchain Brands - Brands 3.0

We have recently witnessed the influx of huge brands into the Web3 space such as Adidas, Tiffany, Starbucks, Gucci, Prada and so many more. These brands are leveraging Web3 as a new channel to build brand awareness, loyalty, engagement and reduce retention rates.

Web3 primitives allow customers to become Owners creating a new paradigm shift where Collective ownership and value co-creation are core ingredients in brand building.

In addition, Web3 primitives enable New models of Loyalty and Engagement using NFTs and smart contract composability that offer a better way to govern and implement loyalty programs that were not possible in Web2.

Introducing Experience 3.0

The Future of Loyalty is Tokenized Rewards

Loyalty programs will not be built on a single NFT, but rather a collection of composable NFTs and smart contracts that connect like Lego Bricks. This capability will enable a whole host of possibilities for brands and their consumers, starting from composable NFTs with rewards such as providing exclusive access, encouraging participation through gamification, and becoming a large part of a consumer’s digital identity, brands can leverage tokens and NFTs to drive hyper-personalized engagement and retention.

Membership Token(NFT) — Non-transferable Token (soul-bound) token serves as an access point to a brand’s loyalty program and specific tiered or individualized perks and benefits. “Soul-bound NFTs” means that these NFTs can’t be sold or traded, but are instead bound to the individual. This NFT can also be Dynamic, which changes and evolves over time. The evolution is a reaction to a combination of both off-chain data (e.g. location data), and the other NFTs that accumulate in the loyalty members’ wallets over time and through their engagements.

Reputation Tokens — Reputation Tokens are a collection of Non-transferable NFTs that represent any activities or actions the user performs related to the brand and serve as a non-transferable reputation signal to recognize ongoing member contributions.

Not all activity is equal and as always there is a need to filter signal from noise. But with the right formula, embedded in smart contracts, reputation systems can be built such that they can authentically recognize which activities the community deems as value contributing and having a positive ‘impact’. You should earn points based on how much value you’re creating for the platform

Utility Tokens — This is the Community coin or Brand token that is a transferable liquid asset rewarded to holders of points on a regular basis.

Brand Experience is Owned & Controlled by Consumers

In web2, identity and reputation are ‘rented’. It is not owned by the user but instead is controlled by a brand’s proprietary identity and reputation models. Hence, it’s not portable or transferable. The identity you’ve built and the reputation you’ve earned with one brand is largely lost once you decide to leave their platform.

In web3, your identity becomes sovereign and you become the sole owner of your data, autonomously controlling how you present yourself and what you expose to whom. Thus, your on-chain identity becomes both composable and portable as a flexible passport to unlock access and experiences with different brands and metaverses.

As an example, imagine if your Doordash graph of food preferences was available to uber eats or your Depop search and bought items were available to a new brand’s shopping site you just visited, then uber eats and the new shopping site would already know your preferences and you won’t need to spend hours searching for what you are looking for. This way any new brand, platform, or community you enter will deliver truly individualized experiences that reflect your behaviors and preferences at a one-to-one level all the while having full ownership and control of your own data!!

Quest is building the future of Brand Loyalty Programs and Experiences. We are actively working with Brands and Platforms interested in implementing Reputation and Reward mechanisms. If you are a marketer, brand owner or developer interested, DM me on Twitter or setup some time to chat here on my calendly here.

Find out more about Quest here,