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The future is now: Loyalty Programs and NFTs


The future has arrived, or so it seems. A new reality of products has come to the attention of future-minded companies and individuals which is causing quite a lot of hype: Non-fungible tokens (NFTs). Don’t worry, this isn’t an Aldous Huxley-ian, Brave New World-Esque invention, but rather a fascinating concept that has taken the ever-expanding industry of crypto and blockchain and introduced very exclusive ownership driven sentiment in the digital world.

This can range from a cute pop-tart cat meme that was sold for $590,000 USD (Nyan Cat) to the almost $3 million USD spent on the first-ever tweet from back in 2006 from Jack Dorsey – CEO of Twitter. Or perhaps you prefer more entertainment-oriented industries whereby in this past year, musicians found a way to reward their fans for their loyalty by offering them NFTs. In a recent example, the band Kings of Leon not only released its album as an NFT but also allowed fans a chance to win one of six golden-ticket NFTs. The tickets offer VIP perks for future concerts, such as lifetime front-row seats as well as access to a variety of artwork that was unique to those shows.

– As you can see, NFT can become a digital award for a digital customer and thus open a new chapter in building relationships with consumers – a bond based on exclusivity and uniqueness. So it is a great opportunity for creators and users of loyalty programs. Nothing increases the customer’s attachment to the brand as much as the feeling that the brand recognizes him, appreciates and distinguishes him – explains Tomasz Wawrzynów, CEO at Sparta Loyalty, which created the proprietary loyalty platform; Sparta Loyalty.

This new and exciting trend of ownership and collecting isn’t just a way for money to enter through blockchain methods or selling internet memorabilia for exuberant amounts of money. It provides a more gracious and modern way of bringing exclusivity to the digital world. Here we find the hints of status and a version of privileged rewards that go hand in hand with existing loyalty programs – A digital reward for the digital customer you could say. Evidence of this already taking hold in retail industries is fervent as companies such as Estée Lauder and Hugo Boss are among the first to capitalize on this brand new opportunity, paving the way for many more companies to follow suit.

What does this mean for businesses who already possess loyalty programs and are hoping to jump at this existing prospect? Is this a sure method to revamp existing loyalty programs, or is this going to completely change the paradigm?  In this article, we will explain the basics of blockchain, NFTs and how you can utilize them for your loyalty program and business.

Understanding NFTs and Blockchain

So what do NFTs actually entail and how does this tie into blockchain? Simply put, NFT stands for Non-Fungible Tokens. In short, an NFT acts as a certificate of origin by utilizing blockchain technology. Confused yet? Well to better grasp this concept we first have to understand some basic blockchain fundamentals.

The Basics of Blockchain

Blockchain is a decentralized public network that allows people and companies to store and securely transfer information and currency instantly. The term blockchain also refers to how the data is stored in ”blocks” of information on a list (a ledger) and then linked together in a permanent “chain.” When a new block is added to the chain, it makes the previous blocks even harder to modify, which helps each block become more and more secure over time. There are several aspects that make blockchain technology unique, which can be translated into many business applications, in our case NFT’s are secured and verified using blockchain technology.

Blockchain Is Accurate and Decentralized

Blockchain is highly accurate. Every action in a blockchain is recorded and there is nothing left out. Once the action is recorded and stored in an information “block,” each block has a timestamp and is secured. The entire record is available to anyone in the decentralized system, whereby it enters a large network that is distributed over many, many computer systems. This is very similar to how a Google Docs sheet works where a single document is shared across several users.

Blockchain Is Permanent and Secure

As each block is completed, it joins the other blocks on the chain creating a permanent record of every transaction that is available to all the users of the blockchain in real-time. This combination of features creates a high degree of security and makes the blockchain very difficult to change. In the case of cryptocurrencies, transaction authenticity is validated by multiple computers from within the blockchain network. Each computer contributes some of its processing power to anonymously calculate and review each aspect of the transaction, and then to update the value on the final report. 

With all of this in mind, it means that the information displayed on a ledger is:

  • Unchangeable/Unalterable
  • Current and up-to-date
  • Has a strict verification process 

NFT: Authenticity and Security

Taking this all into consideration the situation is the same for NFTs. Non-fungible tokens are stored in very much the same way that crypto is stored on a blockchain ledger, where the same parameters apply. 

To break it down further you find yourself in a situation where you purchase a digital artwork – an image for example, such as a trendy meme – that has an NFT attached to it. You will have proof of two things: that you are the sole owner of this picture, and that the image is considered the original. 

It is also important to mention that blockchain doesn’t store the digital media itself, but only stores the details that are associated with the image. These include its title, description and the sources where it can be located. 

To summarize, an NFT of this sort means that it comes with a blockchain-based certification token that warrants its authenticity and its security. This is very much parallel to the real physical art world where there is only one ‘The Starry Night’ painting by Van Gough which is in a museum and protected, while there are copies everywhere that are not authentic and lack authentication. 

NFTs have become extremely popular as they grant users the ability to own a piece of internet history – further expanding on the ideas of exclusivity and ownership. Particularly when it comes to unique pieces of digital art which further drives home the fear of missing out for certain users. This is further compacted by scarcity in the marketplace and the knowledge that it is a secure authenticated item to possess. 

Another point to consider is what actually constitutes an NFT or what can become an NFT? With anything digital or existing in the virtual world NFTs can be practically anything, as long as they are able to be hosted via a digital means. These can include:

  • Unreleased music by artists
  • Videos of sportspeople participating in practice
  • Unreleased or blooper footage from cinema
  • A moment from Internet history (Memes, Social Media Posts etc.)

The desire for these NFTs is also exemplified by the amount of money that is being spent on them. This is clearly depicted by the aforementioned Nyan Cat meme selling for $590,000 USD, whilst Jack Dorsey’s first Twitter post went for an eye-watering $3 Million USD. But you must also take into account that you have to be the owner of such properties to be able to have any claim or even have the possibility of putting them up for auction. 

Hence, why NFTs are paving a new way for brands to create collectable digital items as they have entered a completely new domain of brand love, that only is specific to a whole new emerging paradigm. Simply put, NFTs are relatively simple to create and put up for auction (you need to invest in some cryptocurrency and host your NFT on an auction site) which in turn can translate into a lot of easily earned ROI with minimal effort. Some examples that could be used as NFTs are using old photos from the initial launch of a company or selling vintage items/services that the company used to have, but only have now in a digital form. 

As mentioned before, the options are limitless. 

This all factors into a customer-centric emotional space and satisfaction as they believe if they can purchase an NFT for a brand that they desire, it gives a sense of pride and exclusivity which further translates into a deepening sense of brand love, loyalty and appreciation – which coupled with the ever-expanding social media presence we have in our personal lives – is a synergy that is not easily matched.

 Providing the client with a digital item of high sentimental value, which is also unique and individual, influences the creation of an emotional bond with him. Having an NFT brand that is close to him gives him an additional sense of pride in being its client and the belief that he is in an exclusive group of selected people. All this translates into even greater loyalty and commitment, which is worth using in your strategy of building relationships with the users of our products – explains Tomasz Wawrzynów from Sparta Loyalty.

NFT’s and Loyalty Programs

Now that we have explained the basics of blockchain function, the appeal of NFTs, their impact on brand development – how are NFTs going to help loyalty programs?

Well, harkening back to the Estée Lauder’s brand, Clinique, we presented earlier on in this article, Clinique tapped into this resource with a brilliant scheme. They used an NFT raffle that was coupled with their Clinique loyalty scheme to promote their entrance into the NFT world. 

Participants could enter the raffle by sharing their interest on social media outlets (Facebook, Instagram, TikTok etc.) which in turn presented a positive feedback loop for Clinique. This was genius as using social media for contestants as an entry requirement for winning the NFT ensures high participation rates, and makes the whole experience both enjoyable and unique, while driving a viral disposition for the brand. This drove interest in Clinique’s overall brand, but it also spearheaded interest in their loyalty program. 

Three key ideas to remember about NFTs to help supplement your loyalty program

If you and your company are considering implementing NFT’s into a loyalty program, there are 3 key ideas that we recommend for you to consider:

Remember that uniqueness is key
The implementation of NFTs is simple but it is easy to get carried away. NFTs are meant to be unique and limited items, not mass-produced. They are called non-fungible for a reason. Keeping exclusivity and as close to rare as possible keep them shrouded in a mystical sense and uniqueness. Furthermore, each NFT needs to function in design with a specific context for your company – a specific campaign or sales period where the dimensions of the NFT are constantly changing for each given idea.

The availability is what drives the experience

When creating campaign ideas for your company and loyalty program, you need to figure a strategy that best suits your style of business. This can entail whether you wish to run NFT rewards occasionally or in a specific sale routine. Also, participation should be highly encouraged to your most intimate clients (as a reward for their loyalty) but should strictly emphasise their limited-time availability. Fees or points should use a point of entry but you need to scale that to your particular industry. Sometimes you can also consider deciding whether you wish to give NFTs as a rewards scheme for milestones hit by your customers. This could be achieving the highest tier in your loyalty program or earning a certain amount of points.  Decide whether you wish to run NFT reward campaigns occasionally or consistently. 

Introduce competition into the mix to drive desirability and exclusivity

Having social media contests is a great way to encourage participation across the board. When introducing such a competition for the chance to win an NFT, the situation can escalate organically and generate a lot of positive attention for your company. A great solution is also to create a social media auction for the members of your loyalty program whereby you have live bidding on an NFT. To spice it up further, you could also propose a bidding scheme where members use their points to be able to attain the NFT. With the abundance of options and the nature of NFTs being quite literally expansive, the possibilities of what you can create for your members is limitless.

Reinventing the digital sphere – NFTs and the future

The concept of NFTs is an exciting prospect as our technology-driven lives become more and more integrated. If you were to ask people 10, 20 years ago whether these sorts of digital products would be worth this sort of money, most people would laugh it off, or doubt its success. 

Keeping up with the times and being a trendsetter is definitely a risky gambit, but when done correctly and is adopted by a larger audience, the results can be epic. As this new rush of technology is coming in, we will observe new ways companies will try to integrate this new medium into their business practices and it is without a doubt loyalty programs will be affected. 

– The value of loyalty programs and their real impact on business are beyond discussion today. Our experience shows that a loyalty program well suited to the individual needs of the client guarantees an increase in the participant’s basket by up to 30%. While loyalty works so well, it’s worth introducing new elements to it, such as the NFT. After all, it’s all about our relationship with our customers. In order for them to be the best, we must follow market news and offer the most loyal consumers something that they will not get anywhere else. Thanks to this, we will strengthen their loyalty and we will also attract other customers to our actions. It is worth taking this opportunity – sums up Tomasz Wawrzynów, CEO of Sparta Loyalty.

The most important consideration is to ask yourself, is your company ready to be a part of this new technology?

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