Loyalty Series Part 1: A look at Web3

Speaker 1: 0:06

Welcome back everyone to Marketing Meets Web 3. This is the first episode in a special series about Web 3 and loyalty marketing. Alberto, tell us about what we're going to get into here.

Speaker 2: 0:17

Hello, nick, as you said, this is a four-part series the first one we do in the channel with Web 3 thought leaders and builders that dives into the realms of Web 3 and loyalty marketing. In this four-part talk series we will break down emerging Web 3 trends, the implications for businesses and how this technology stands to revolutionize customer engagement. In this first conversation we want to cover some basics that we think will lay the foundation for the guest conversations that will come later in this series. First, I'll talk about how this is going to work. I'm going to be moderating the conversations. Nick, of course, will be here chatting to our guests. That's it. What is the reason why we're doing this series, nick? Who can make the best out of it?

Speaker 1: 1:09

Yeah, so this series of conversations that we've put together, what we really have in mind here is a series of conversations that can help marketers and business owners understand the opportunities in Web 3. There's a lot of information out there. There's a lot of jargon out there. It can be a confusing technology landscape to navigate. We're hoping to bring some color to the topic so that we can help business owners entrepreneurs understand the opportunities here. On top of that, we're also going to take a deep dive into the relationship between Web 3 technology and loyalty marketing. How can marketers and businesses actually use this technology to create better customer relationships, create more meaningful interactions and drive increased customer loyalty and retention?

Speaker 2: 1:58

Why do you think this is important now? Because we've been talking about loyalty, web 3, and the developments that are happening in this industry for a while. We made the decision of doing this series at that moment in time. We thought it was relevant at this specific time, so why is it at the time now?

Speaker 1: 2:18

I think we're at a unique inflection point with this technology. There have been, over the past year or so, there have been some really interesting examples or experiments of early adoption from some really big brands. Brands like Starbucks, Nike and Reddit are all playing in their space. They're all doing things to try to activate new audiences, to try to engage and create more meaningful and deeper relationships. We think this is a great time for businesses to start paying attention and to start learning about this technology, because obviously the big players in the industry are also taking it seriously.

Speaker 2: 2:56

Big companies, but also small companies like Paggy Penguins, which has started very small and is becoming a lot bigger. We will be talking about these examples and these companies in the series. I talked about the penguins because the name is funny. In one of our conversations we're going to go deep into how they made it from a very small project to almost a company that is overtaking a lot of the competition in this industry. So all that will be coming up in the next conversations.

Speaker 2: 3:28

But before we get into that, I think it's important to cover some of the basic terminology that comes up. It's not really essential, but it's going to help sometimes, because some of these terms you may have heard I mean, of course, nick, you have, but I mean for the audience. You may have heard this and maybe you understand what they are, but maybe you are not too sure and these come up in the conversations. They're not again, they're not really relevant to understand anything. So if you don't understand them, it's fine. It's not like we're going to be covering this in detail, but I think it's important to just say a few words about each of these because I think they help with the flow of the conversation and it will probably help understanding everything better. Can we talk about a bit of these terms that come up in the conversations, nick?

Speaker 1: 4:18

Yeah, let's, let's drive through some basics. So you know, as you said, I think it's helpful for people to have a baseline understanding of the concepts in web 3. It helps understand the conversations in more detail and, I think, gets around some of the complexity. Again, we're not Hope, expecting or really hoping that people become experts on the technology side of this. This is about business impact. This is about the opportunities for creating better relationships with customers, but some fundamentals are helpful.

Speaker 1: 4:47

So one of the first things that were you know fundamental concepts is this idea of a blockchain. So what is a blockchain? A blockchain is simply a new type of data layer on the internet. You can think of it a little bit like a database. The difference here is that it's an open and public data layer, so it's a, it's a ledger, it's a place where people can openly read and write to, and what's special about a blockchain is that it uses Cryptography underneath the hood to basically make sure that the information stored in a blockchain is number one. It's immutable, that is, it can't be changed after it's written, but it's also very hard to counterfeit. It's almost impossible to fake transactions with modern blockchain technology, and so what that does for business is. It creates this new open data layer that businesses and consumers can now read and write from, so a little bit like a shared database.

Speaker 1: 5:45

The next concept that we'll talk a bit about in this series is the concept of tokenization, and I think the easiest way to think about tokenization is to think about real-world assets first. So if you have dollars and you want to put those into a bank so that you can spend that through a checking account, you're gonna have to go to the bank or you're gonna have to, you know, use your online services to basically move money into the account, and the bank now is going to Basically a test and say that yes, you have those funds, you've deposited those funds and now you're good for that money, and so you can go to Amazon or you can go use those dollars online. You can, you know, pay a credit card, whatever you're gonna do with that money, but the bank is kind of in the middle, providing Validation that you have those funds, and so you have essentially turned your dollars that you deposited into a bank account into this way to move money digitally. Tokenization is kind of the same concept, but we're using a blockchain instead, and so what we're doing with tokenization is we're creating an asset and this could be anything, it could be a picture, it could be the title to a real-world asset, lots of different things that we might want to tokenize and now we are connecting them to a blockchain, and so what that's doing is making sure that that asset Can now be accounted for in an open way on this public ledger. And so if if I'm gonna send something to you, alberto that is now a tokenized asset and we can move that back and forth on a blockchain and we can account for that value transfer in a new, novel way. What this also enables, when we start valuing, transfer, transferring value, is this idea of kind of programmatic Movement of value, and that's possible with web 3 because of something called a smart contract.

Speaker 1: 7:36

Now, a smart contract is basically code that lives on a blockchain and Responds to certain conditions, and so what's cool about this? We can think about this a little bit like if this, then that for the transfer of value, and so if there is smart code out there on a blockchain as a smart contract and I send an asset to that smart contract, it can be programmed to do certain things. So maybe I'm going to send a token, tokenized value, to a smart contract, and the smart contract is now going to divide that in a few different ways and send that to a creator, and send a royalty somewhere, and send Another piece to somebody involved in the creation of that asset. So lots of different ways to basically use this code as a smart router, as a way to program various outcomes into a blockchain and and do that automatically. And what's cool about that is we don't have to rely on a trusted entity in the middle, so I don't have to trust that the bank is going to do the right thing. I don't have to trust that an organization isn't going to mess that up.

Speaker 1: 8:37

It's on the blockchain, it's code, it's just going to run and when that happens, we have these tokenized assets on a blockchain. We have these smart contracts that can move these value around. We can now do interesting things as peer-to-peer interactions. So you and I now Alberto, we can send value back and forth and we don't have this issue of having to trust each other, because we can simply use a smart contract in the middle that says, if Nick sends value to Alberto, then Alberto sends another asset to Nick, and so this is all encoded into a smart contract. It facilitates this peer-to-peer value transfer. And when we connect all of the dots between these things, that's really what we're talking about with Web3. And so Web3, it's an umbrella, it's a catch-all for these terms like blockchain, tokenization, smart contracts and peer-to-peer value transfer.

Speaker 2: 9:34

Yeah, I love how you connected all of them at the end, because you're talking about what blockchain, tokenization, smart contracts and then, when you put everything together, you create a picture of Web3, which I think already helps a lot because, well, it's one concept that also comes up a lot and it's not really well-defined, in my opinion, and so, with that picture of what Web3 is now, we can talk a bit about what's going to come later. And what comes later is, as I said, it's a series, and in the next conversation we're going to be talking about three different aspects in which loyalty is changed, is improved, is enhanced, is working with Web3, or the other way around. Three aspects in which Web3 can somehow complement loyalty in the way we understand loyalty today. Can we talk about those three aspects, just to give a bit of a heads up afterwards coming.

Speaker 1: 10:34

Yeah, the conversations that we have in this series, they're really. We gave a lot of thought to the aspects of Web 3 that we wanted to draw out in these conversations. We're really targeting three key ideas here. The first is this idea that blockchains and tokenized assets and allowing customers to own those tokenized assets actually gives businesses a new way to obtain customer insights. So, using blockchain technology, we can now start to think about our customers differently. There's new data available that gives us new and more meaningful ways to be able to basically segment our customers and think about creating relationships with them. So the first conversation we're going to have is with Drew Beechler. He's from Holder, which is a Web 3 CRM looking for ways to connect Web 3 data to Web 2 marketing tools. So that's a great conversation. We dig into what this data can do for a business and how marketers can use this again to drive new insights.

Speaker 1: 11:40

The second area where we see a lot of overlap between Web 3 and loyalty is this idea of user ownership. So in traditional loyalty programs, what we have is a situation where a business is basically saying, hey, you've spent some money with us and we're going to give you some points. It's very transactional and so these earn and burn type of programs. They might create a customer that comes back over and over again. However, in certain situations, a customer maybe doesn't have a need for those points. There's only maybe so many times that you can shop with a business within a certain period of time. So you often feel that you have this value that you've accrued, it's your value as a customer, but you can't use it. It's locked into this siloed world, or sometimes the rules of a program changed. Recently, dunkin Donuts made a change to their points relationship between what you earn and what you can spend and upset a bunch of customers. So the idea that customers own their loyalty is really something that's starting to come to the surface, and blockchains are great for empowering ownership for users.

Speaker 1: 12:45

And so what's cool about this is, with a loyalty program that is enhanced by Web 3, we can start to think about what does it look like when a customer actually owns their loyalty? What does it look like when a customer can raise their hand and say you know, I think I'm going to trade the loyalty that I've learned the value for being a loyal customer. I'm going to trade that with another person in the network, and there are a lot of ways to arrange these relationships right. It doesn't have to be entirely open, it doesn't have to be entirely closed. We can think about this as a new playground for collaboration. And that really brings us to oh and, by the way, that user ownership conversation.

Speaker 1: 13:21

We're going to speak with Toby Rush. He's from the company Deem and they're actually building better experiences and better ways for people to own their assets. And so Web 3, as we'll talk about in this series, has some user experience challenges, and Deem is making that a lot easier for companies to create better onboarding experiences. That leads us to the final area where we see a lot of overlap between loyalty and Web 3. And that's going back to this idea of collaboration. So one business collaborating with another business or a brand collaborating with a creator or a brand empowering their customers there's all kinds of different ways to collaborate when we have assets that are owned by users, so their customer loyalty is owned by them, and now we create these relationships with other companies and using Web 3 technology and smart contracts. This is actually a lot easier in a Web 3 world than it is with Web 2.

Speaker 1: 14:20

Web 2 often requires really deep technical integrations. Starbucks and Delta have this partnership that they've been working on for years, literally years. It's taken them to stand that up, and there is a lot that goes on behind the scenes. That's not technology, and obviously that still needs to happen in a lot of cases, but on the technology side, when everybody is sort of looking at this data layer called a blockchain, it makes it much easier for companies to be able to collaborate and it makes it much easier to reference the same customer data in ways that are safe for the customer, are valuable to the business. So there's a lot more opportunity when it comes to collaboration, and so that'll be the third conversation in this series. We're going to speak with Thomas Pan. He is a Web 3 thought leader, a prolific writer. Puts out a lot of great insights about Web 3 and how this is empowering businesses for the next generation customer.

Speaker 2: 15:14

Thanks, those will be the conversations and, as you said, I think the important part of understanding here is the overlapping that we've been talking about, because loyalty has been around for ages and Web 3 comes now. But I think that it doesn't take loyalty away or it doesn't change what loyalty has been offering so far. It just does this in a different way. Probably hopefully we will see during the conversation in a better way and we can talk a bit about what are these benefits that Web 3 can bring in those parts of loyalty with which it overlaps.

Speaker 1: 15:54

You know, web three in and of itself does not replace loyalty initiatives, right, there are plenty of web two loyalty initiatives that work just fine, even the points programs. They're great for many instances. Web three is enabling technology, so it doesn't really replace things, it makes things better. You know, when email came along, it didn't replace the need to communicate, it just made communication a lot easier, more convenient. We could work at a much quicker pace that matched the needs of business and kind of modern society. And so web three, we think, is doing the same thing for loyalty, and so we're going to dig into some of these points throughout these conversations. But we wanted to highlight a few here for listeners so you can get a preview of what's ahead. We just talked a little bit about the technology integration. When we're talking about collaborations between companies or even within a single company, the larger a company gets, the harder it is to actually roll out technology initiatives. So a loyalty program for a coffee shop with one location is going to look a lot different than a loyalty program for Starbucks, which may be working across many different regions and many different countries and has a lot of considerations in terms of technology integration. Web three can be this enabling technology layer that actually makes it easier for other businesses to collaborate by plugging into that shared data layer or by making it easier for a single large business to roll out an initiative that plugs into this data layer underneath. And so web three enables lower technology lift in a lot of these cases. It also makes these programs a lot more scalable. So today's programs for very large brands they're handling millions of customers working just fine. However, when you start combining brands, if Amazon starts to collaborate with retail locations or retail businesses like big box stores, what does it look like for database systems? When you start combining millions of customers with millions of customers, that's a kind of demand that can quickly get out of control. And so what's nice about web three is again going back to that shared data layer, the blockchain. It gives us a way to cut out some of the redundancy. It gives us this kind of shared layer that we can move data across in a customer centric way. So these programs become scalable in a much more fluid and ad hoc way, and so these collaborations can happen more. In the moment, we don't have to worry so much about systems that are going to completely blow up If we start combining different, different partners. So scalability is a huge benefit.

Speaker 1: 18:37

Peer to peer commerce we talked about that a little bit, and web three really enables peer to peer commerce in much more meaningful and interesting ways. So when a user, when you and I, can start sending our loyalty value back and forth, either openly or as part of a collaboration between companies, that becomes a lot more interesting. That becomes more interesting for businesses because they're now creating this sort of virtuous cycle of customers that are moving between the same brands Right, and so we get this natural brand affinity happening between customers that are using their accrued value across different businesses. We also start to get this interesting dynamic when users want to trade their value or sell their value or give away their value. You know, if I gift my accrued value, my loyalty, to my mom and my mom's not a customer of that brand, that's a new way for a business to acquire a customer.

Speaker 1: 19:31

If I use that value to trade with you for something that I want from another brand in the collaboration circle, that is actually a positive reinforcement for me as a customer, because I earned the value from brand A, I spent it with brand B, but I'm still thinking of brand A Right. So it creates these reinforcing behaviors with customers when they can start to be recognized within these different loyalty partnerships and collaborations. So we think that there's a lot of opportunity here to enhance loyalty with Web 3. We're going to dive into all of that. You know ideas about creating exclusive experiences, more experiential rewards, thinking about loyalty more as a membership instead of just a transactional relationship with a customer. There's some really exciting stuff ahead.

Speaker 2: 20:18

What makes it very approachable is the examples that the guests use, because I think it makes it very easy to understand and to follow up on what these companies are doing. Because you talk a bit about these benefits. I think when they explain them in the context of a company that is already working and is making money and all that, I think it makes a lot more sense. So we are wrapping this up. We have three conversations after this one. This one, as I said at the beginning, it's just a basic intro to what is coming, and maybe we want to just say a few words about what's coming next. We already talked a bit about the guests, but maybe you can say a few words about what can the listeners expect from the next three conversations.

Speaker 1: 21:10

Next conversation is with Drew Biesler. Again, he's from Holder. They're a Web3 CRM, so they're enabling and rethinking how to give marketers new insights from Web3 data. So this transfer value that we're talking about creates a lot of data. When we have assets moving back and forth on a blockchain, that creates indicators for different types of insights that we might want to draw about who a customer is, what their behavior looks like, things like customer value, customer engagement, customer activity can give us a sense of who's most active. So, using Web3 data, connecting that to existing Web2 data and creating new insights for customers. Drew is going to dive deep with us on that.

Speaker 1: 21:53

Next up we'll talk with Toby Rush. Again, he's from Deem. They are on a mission to create these really seamless onboarding experiences that are very in tune with the mobile first mentality, that leverage technologies like SMS to make sure that people just have a very smooth, very natural, uninhibited experience when they're trying to interact with Web3 programs. So he'll take us deep into what they're doing and talk about some of the benefits of these easy onboarding experiences that land or end in a customer owning their own assets. Then we'll wrap up the series with a conversation, again with Thomas Pan. He's a thought leader in the Web3 space and he's going to share a bunch of insights about collaboration and co-marketing, what this means for marketers and businesses and how this really blows the doors open for hyper-collaboration between companies in the future. That is much more fluid, that is much more responsive and that is much more customer-centric than, I think, a lot of the collaborations that we have seen to date.

Speaker 2: 22:51

Okay, so this is it. This is the plan for what's coming. Well, as I said at the beginning, I think this is a very important conversation. I mean not because we are doing this and I don't think we're being super prescient about this or we are seeing the future before anybody else. What we're doing is we're looking at what's happening and we're just trying to put everything together for listeners who may be interested in growing their loyalty efforts, improving their membership reward programs or basically help create a better or a community from scratch. So we think that this is very important to be discussed at this moment, and I think those who understand and who know this now will be in a better position in the future. Nick, anything else you want to say before we stop?

Speaker 1: 23:39

No, let's dive in Really excited about these conversations.

Speaker 2: 23:42

Well, I will be seeing you in the following conversations and I will be seeing also the audience in the next episode.

Speaker 1: 23:49

Thanks, Samantha.