Finance and Accounting

The inverted funnel: How blockchain and NFT will revolutionise marketing

In marketing, a traditional consumer funnel represents the customer journey from the point where the consumer has an interaction with the brand to the point where a purchase was made. Potential consumers engage with the brand through various marketing channels and activities and move further down the funnel till they either drop off or buy a product. Marketing funnels help to develop marketing tactics, provide a better understanding of the target audience, improve customer relationships, and optimise the purchase cycle. The traditional marketing funnel requires a fair amount of investment in terms of time and resources. On the other hand, the inverted funnel flips the traditional marketing funnel upside-down, and is all about enabling the existing customer base to become brand advocates and promote the business. The inverted funnel focuses on the customer experience, which in turn, translates to happy customers who give more recommendations.

Unlike the traditional marketing mix model, where the customer journey is linear, the inverted funnel approach lets brands place customers first, by providing products and services that the customer wants and needs. In a paradigm shift of the marketing mix, the inverted funnel approach will let product evangelists and loyalists interact with potential customers, and create a non-linear customer journey, with possibly no purchase at all, but build a brand that is talked about all the time.

Blockchains are poised to revolutionise marketing by facilitating the inverted funnel model. Brands can use Non-Fungible Tokens or NFTs, which are digital assets stored in blockchain. As with physical assets, NFTs can be bought and sold, however, they cannot be exchanged. In other words, an NFT guarantees that a digital asset is unique. There may be copies of the digital asset, but there is only one original. Each NFT has a digital certificate of ownership and authenticity, which is stored in blockchain. To draw a parallel to the physical realm, think of the painting “The Starry Night” by the Dutch painter Vincent van Gogh. There are multiple prints, but there is only one original, housed at the Museum of Modern Art, New York City. Let’s now look at some of the ways NFTs and blockchain technology can be used for marketing.

Drive product innovation:

With metaverse poised as the next great frontier of the internet, the transition from a digital world to the physical world is going to be seamless. Brands can launch a product or a prototype as an NFT, record customisations, create a personalised product for users and ship them right to their doorstep, in an agile* manner. And, if this product is popular, it could have several digital clones which could be made available to others.

Improve audience reach:

NFTs help increase brand awareness, create unique customer experiences, build brand interest, and help gauge consumer interest in products.  They can be used to create product pre-orders, which help brands optimise inventory, especially for new product launches. Luxury brands such as Louis Vuitton are using NFTs to provide immersive experiences via gaming and deliver the brand message to the consumers of the future.

Create exclusive brand experiences:

Brands can use NFTs to create digital collectibles and grab audience attention. For example, Coca-Cola jumped on the NFT bandwagon with Coke’s digital replica of the classic 1956 vending machine, a metallic red jacket wearable, trading cards and so on.  Exclusive experiences can be curated to not just market physical-world products, but also generate revenue. As the user moves in and out of the metaverse, digital world experiences can manifest into the physical world. By drawing on a loyal customer base, brands can attract consumers directly, and eliminate the need for middlemen.

Personalise pricing and discounts

Blockchains can maintain an authentic network of product evangelists and promoters, which used to give special discounts and promotions to these brand ambassadors. In the digital world, each NFT can have a personalised price per person, and give the user a unique value proposition. The buyer has the flexibility to pick up the item in the physical world only when it meets a price point that they are willing to pay.

Rather than simply build interesting NFTs, brands need to focus on the NFTs that would improve audience reach and consumer connect, and leverage blockchain technology for competitive advantage. With a $800 billion global Metaverse revenue opportunity predicted by 2024 (according to Bloomberg), companies need to ramp up their marketing platforms to provide immersive, personalised experiences to consumers while being uncompromising on security and privacy.

*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.

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