Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 11)

Past Writings on MuDAO

µniverse and Bharatverse: Web3 Explorations:

Brands are faced with three challenges: the rising cost of new customer acquisition driving a “doom loop” of spending on Google and Facebook, attention recession among existing customers which leads to retention recession and continuous churn, and retaining existing customers since competitors are persistently targeting them for acquisition. Brands selling through marketplaces have another challenge: how to build direct relationships with their customers since marketplaces do not share customer information.

These challenges can be reconsidered thus. In the world of martech, the focus needs to be building deep relationships with existing customers so that the need to constantly offer transaction-linked incentives can be obviated. This needs brands to shift the focus to the upstream of attention, engagement and habits to create “hooked customers”. In the world of adtech, the power of the intermediaries (Google, Facebook in digital advertising, Amazon in marketplaces, and Instagram and Tiktok in influencer marketing) drives up spending and creates barriers to profitable growth.

Solutions need to be thought about against the backdrop of three colliding worlds: customer loyalty, gamification and crypto. In other words, how can brand-customer relationships be reimagined in a Web3 world? This is where the idea of the µniverse comes in, with attention tokens as one key building block.

… Consider an entity (MuCo) which creates a pan-brand attention and engagement loyalty program. Brands can buy Mu from MuCo and reward their customers for specific actions linked to attention, engagement and zero-party data. Customers collect Mu from across their favourite brands and then can redeem them at the Mu Shop.

… As Mu tokens acquire value beyond what is set by MuCo, it can become an “attention crypto-currency”. Transactions are stored on the blockchain to ensure transparency. Every customer now has a “Mu Wallet” where they can hold their tokens. And as marketers and customers see value, the usage of the tokens can also diversify. A MuBox (or micronbox, as I have termed it previously) can aggregate all messages with rewards into a single inbox. A MuBrowser can address privacy and generate rewards. These would be the baby steps to creating the µniverse, a virtual world where brands and customers can engage with each other.

Constructing the µniverse (envisioning the near future):

MuDAO had to solve the cold start problem and get both brands and customers to trust that a decentralised system could work. Luckily, the popularity of cryptocurrencies helped address the initial scepticism. Besides, the initial success of MuCo had enough brands and customers on board to get traction for the second avatar. The µ collected by customers now could be traded on an exchange so brands could buy it. The combination of abundance and scarcity of µ created value for both sides and helped drive µ not just as a means of earning some goodies but also as a long-term investment. For the first time, attention was being monetised – not by BigTech, but the people themselves.

Step by step, MuDAO solved the three biggest problems that brands faced: attention recession, repeat customers, and new customer acquisition. Attention recession was solved by using atomic rewards in the form of µ in push messages, starting with email and then expanding to the other channels. By calibrating µ to customer lifetime value, brands also started driving repeat purchases and loyalty – for the first time, they had a hotline via the Micronbox to their existing customers. With end customers valuing µ, it became easier to ask existing customers to help spread the word among their friends and family about the brand. Both the referring customer and the referred customer benefited from the rewards, and the brand could save on spending via the BigTech platforms.

MuDAO thus created a new ecosystem – the µniverse – between brands and customers. The relationship had meaning for both – attention was not taken for granted by brands, and incentives helped customers along their engagement journey.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.