Upside co-op | Magic Quadrant for Brands

Magic Quadrant for Brands

This is a quick-read follow-on from my earlier post on the big web3 unlock for brands. I’ve basically constructed my core thesis on two mutually reinforcing pillars: 1) digital ownership and 2) community co-creation. Combined, they will rewrite how brands drive growth and retention, providing new avenues for customer engagement and value delivery, while at the same time addressing the increasingly demanding expectations from a younger generation of digital native consumers.

By tokenising customer engagement and loyalty programs, brands can augment and extend the access value of the products and services they provide, in scope, time and place.

  • Scope: digital service extensions, token-gated utility and benefits

  • Time: sustained engagement beyond the transactional relationship, drips rather than drops

  • Place: brand and product experiences in virtual worlds and ‘the metaverse’

Similarly for brand communities tokens can be used as flexible and programmable membership instruments to tailor engagement to a member’s brand relationship status and gate access to community content and experiences accordingly. As such brand NFTs can be used as membership passes, recognising and rewarding their most engaged and devoted fans. Brand ownership and loyalty becomes social: a way to self-identify and a way to belong, a way to fit in and a way to stand out.

More than anything else, brand and community tokens can be used as programmable incentives to align the interests of all involved stakeholders and distribute ownership and returns fairly based on participants’ contributions. Through incentivising desired behaviour, tokens (and the digital ownership rights they represent) become powerful instruments to steer individual and collective agency, with bottom-up contributions and creativity shifting a brand’s value flywheel into a higher gear.

The best brands are the ones that build belonging AND agency, tapping into brand tokens and NFTs as a way to create sustained customer engagement, drive collective agency and share ownership. Web3 is signaling the next phase of the consumer internet, as brands move their activation model from one-to-one to many-to-many, and from access to agency. By aligning incentives, a new and different kind of growth flywheel emerges, one in which ownership unlocks access and access unlocks ownership, progressively turning brand consumers into brand agents and principals.

In short, the magic quadrant or north star for brand tokenisation is community x agency.