Non-fungible tokens (NFTs) have emerged as a powerful digital marketing tool for businesses. NFTs offer many opportunities for entrepreneurs to generate new revenue streams. Here are a few basics to know as you consider how to take advantage of the current NFT craze.
What is an NFT?
Non-fungible tokens are a type of digital asset that can be used to represent ownership of virtual or real-world objects like art, music, images, and videos. Each NFT is a unique property and not interchangeable. That’s why they are “non-fungible.” For tax purposes, the IRS’ definition of digital assets explicitly includes NFTs and virtual currencies, such as cryptocurrencies and stablecoins.
NFTs are created and stored on a blockchain, a digital ledger of transactions that consists of growing lists of records, called blocks. In 2014, artist Kevin McCoy and techpreneur Anil Dash teamed up to create Quantum, the first known NFT.
Since then, the global NFT market size exploded in popularity to reach billions of dollars in 2022. However, future market growth remains unclear with estimates varying widely.
There are scores of brands already using NFTs to provide their customers with a unique and personalized experience to stand out in a competitive market. Now, it’s time to see if digital assets can help you create a community of fans and collectors around your products and services.
Here are five ways that NFTs could potentially grow your small business. ·
1. Create NFTs Tied to Physical Products
“With virtual products getting the hype, it’s a good idea to create one for customers, and even better, to tie it to a physical product. For example, a furniture business can ask buyers to purchase a couch and an NFT version. Nike is doing something similar with CryptoKicks, where customers receive a digital pair of kicks after buying the real thing.
For eCommerce businesses, this represents an opportunity to drive profits. Since NFTs cost little to make, the returns can be mind-blowing. Plus, the smart-contract mechanism can allow NFT creators to benefit from future item sales. If it wishes, a company can stake a claim on a percentage of future profits and program the functionality into the NFT.”
Source: HackerNoon
2. Generate Tamper-Proof Promotional Tools
“Single-use promotional tools such as coupon codes and promotional discounts are hackable. Fraudsters can “brute force” their way into generating the codes.
A brute-force attack is a common hacking technique that uses trial-and-error to guess log-in credentials, passphrases, encryption keys, and the like. If successful, it can result in significant losses for small businesses.
With NFTs, you can use blockchain quick response (QR) codes to generate one-of-a-kind, tamper-proof discount assets for your customers. QR codes use unique private keys that prevent unauthorized tampering or alterations.”
Source: ReBlonde Public Relations
3. Check Out the Metaverse
“Metaverses, which have been called the “new internet,” are places that can be seen through VR headsets or other immersive technology. In each Metaverse, there are things called NFTs that can be used to buy virtual clothes for your avatar, estate development, or tickets to events that take place there. As a small business, you can start advertising your brand in a place like Decentraland by hosting activities in your field and setting up shop there.”
Source: [x]cube LABS
4. Use It As Access To Your Digital Services
“NFTs are also an excellent technology for your customers to access your digital services. For example, if you teach and sell an online course, keep it as your NFT, which your course subscribers can easily access.
Those who hold your NFT will unlock it to find out the content of your online course. They can also connect their crypto wallets to your business website to access the course. This also is a way to win customer loyalty and engage them with your services. Most importantly, you will easily keep the content pirates away.”
Source: Design Hill
5. Create a Customer Loyalty Program
“Establish a loyalty program for your customers with a digital NFT loyalty card. Once a customer is signed up, they download it on their mobile device and scan it each time they do business with your company. They can accrue loyalty points. Then with thresholds you’ve determined, you can push discounts, rewards, or blockchain tokens for in-store use.”
Source: Quantus Creative
Need Funding for Your Small Business?
First Union Lending works with small business owners, getting them the cash they need when they need it. With short-term loans, lines of credit, and SBA loans, among other financing types, our loan specialists can get you access to funds in as little as two days—we do work that quickly. Call us at 863-825-5626 today!