By Evan Fenster, Celo Basis
Atlas Cafe coffeehouse in San Francisco’s Mission district has been a mainstay within the neighborhood since 1996, offering a cushty place for the local people to eat, drink, socialize, and work. Sadly, the pandemic hit Atlas Cafe onerous — its ‘regulars’ got here lots much less usually, as stay-at-home orders disrupted typical routines. This situation occurred all throughout the nation and all over the world. Whereas most companies have reopened, some have struggled to rebuild their common clientele. Atlas Cafe was no exception.
As an Atlas buyer over the summer time, a UPenn pupil working as a summer time intern on the Celo Basis’s Analysis and Innovation crew, and somebody who has seen how NFT tasks can construct manufacturers and communities, I needed to discover how NFTs would possibly assist an area enterprise. This exploration led to an NFT-backed rewards pilot program that simulated how a neighborhood espresso store might market, onboard, handle, and implement an NFT assortment used for rewards.
To run the pilot, I acquired funding from the Celo Basis and assist from my Analysis and Innovation teammates. Finally successful, the pilot served as proof-of-concept for a decentralized rewards protocol referred to as Loka, which is at present in growth.
In Could 2022, I started researching how NFT-backed rewards work to assist companies create loyal clients and presumably improve income and model consciousness. I found that an NFT assortment could possibly be a fantastic instrument for growing and managing buyer loyalty. In any case, long-term rewards applications for espresso subscriptions have been tried and examined, and plenty of manufacturers have already used NFTs to efficiently faucet into desired buyer habits. However, in my analysis, I couldn’t discover any examples that mixed these two methods.
The use-case design is pretty easy: A enterprise rewards clients with an NFT from a branded assortment in an try to extend loyalty. The hope is that by gifting away an NFT that entitles customers to a small reward, companies can entice them to go to extra usually and spend sufficient to make up for the price of the reward, rising total revenue.
The Atlas Cafe NFT assortment was deployed to the Celo blockchain and featured the Atlas mascot, designed by Atlas Cafe and Celo Basis. Every NFT is collectible, tradable, and transferable, and entitled the holders to redeem a free espresso, valued at $4.50, day-after-day during the 10-day pilot.
On July 25, 2022, I launched the 10-day Atlas Cafe pilot with 20 contributors I met on the cafe and requested to affix. I despatched every participant an NFT on to the pockets addresses they designated prior. All through the pilot interval, they may redeem their free Atlas espresso as soon as a day by exhibiting their NFT to baristas. Because the NFTs exist on the Celo blockchain, contributors might additionally use current instruments to view, commerce, promote, and switch them. For instance, they may promote the NFT reward from their cellphones utilizing TofuNFT.com.
To assist inform pilot outcomes, contributors got a type with their espresso, and requested to listing different purchases, if any, and the price of these purchases. These purchases have been made with fiat currencies.
When the 10-day pilot ended, the info was collected and analyzed. Listed below are the outcomes:
NFT-based rewards helped improve visits and total income for Atlas Cafe. Pilot contributors visited the cafe extra incessantly and bought extra objects when there. Earlier than the NFT-based reward, one participant visited Atlas Cafe about as soon as a month, spending a mean of $5 per go to. After receiving the reward, he visited a complete of 5 instances over the 10-day pilot interval, spending about $28 in whole. One other participant, who famous related pre-pilot spending, visited thrice over the 10-day pilot interval, spending a complete of $24.
“I used to be a super-huge fan of the idea and concept of an NFT membership move for supporting native companies,” stated pilot participant Doug Qian. “Within the 10-day pilot, I ended by Atlas nearly day-after-day to choose up a espresso, and it grew to become a fairly important a part of my morning routine. Would gladly pay for a move like this sooner or later.”
Atlas Cafe elevated its model consciousness by way of on-chain earned advertising and marketing and phrase of mouth. Atlas Cafe’s model consciousness grew as pilot contributors unfold the phrase about their experiences. They have been enamored with the flexibility to carry an on-chain, Atlas Cafe NFT of their pockets, and started telling others concerning the pilot. This word-of-mouth advertising and marketing resulted in seven extra individuals becoming a member of the pilot within the first few days.
The NFT assortment created world attain for the native cafe. 4 of the 27 whole contributors joined the pilot from Uganda, Africa. Although unable to obtain the free espresso, they joined to have interaction with the Celo and Atlas Cafe communities. By creating this assortment, Atlas Cafe was in a position to get hold of a worldwide attain with minimal advertising and marketing spend.
On-chain instruments supplied different use-case alternatives. One participant needed to switch the reward from his authentic pockets to a different. Because the reward was represented as NFT, he was in a position to seamlessly accomplish that. One other participant, who was out of city in the course of the 10-day pilot interval, listed his NFT on the market on an open market, making a $7 revenue. The brand new proprietor was then in a position to be part of the rewards pilot for a minimal value.
“The pilot was of unimaginable assist in understanding a buyer phase now we have needed to know,” says Felipe Collin, proprietor of Atlas Cafe. “After COVID, each enterprise worldwide began in search of methods to have interaction and supply extra worth to their clients. Because the pilot began, we noticed a social factor rising in parallel — individuals coordinating to seize a espresso as a gaggle. NFT loyalty applications are a good way to have interaction along with your clients and construct a group.”
Whereas Atlas Cafe benefited from the NFT-backed rewards program pilot, performance have to be added to create a totally developed protocol for enterprise use:
- Automate reward redemption and combine knowledge assortment. Like all cafe, sure instances of the day at Atlas are busier than others. For that and different causes, Atlas Cafe employees usually did not ask clients to finish the shape after every transaction. Whereas this restricted the quantity of dependable knowledge we collected on the register, we have been in a position to complement the self-reports with on-chain knowledge, interviews, and surveys. To keep away from interruptions within the check-out course of sooner or later, automating reward redemption and knowledge assortment will assist assure a smoother check-out expertise, no matter the kind of enterprise.
- Develop this mannequin to different companies (e.g., bigger eating places, native grocery shops) to extend engagement in vertical markets. Statistica survey knowledge launched in June 2022 suggests that buyers, on common, take part in over 16 loyalty applications, but are energetic in lower than eight of them. Using NFTs in a loyalty program can enable customers to remain extra engaged with the model, as we noticed with this pilot.
- Develop extra on-chain NFT use circumstances. Use circumstances for NFT holders might embody on-chain voting. For instance, Atlas Cafe might current an on-chain proposal to introduce a brand new drink, which solely their NFT holders might vote on. The on-chain voting course of would supply utility for the NFT holders whereas additionally leading to helpful client knowledge for Atlas. Moreover, manufacturers might host networking and different occasions just for NFT holders.
Small companies like Atlas Cafe can seamlessly generate NFT-backed rewards that may assist enhance buyer retention charges whereas rising earnings. As soon as developed, the decentralized rewards protocol Loka might assist even the smallest enterprise combine and innovate with web3 applied sciences.
To be taught extra about Celo and its mission to create a future the place individuals all over the place can thrive from monetary inclusion, a wholesome surroundings, and connectivity by way of revolutionary applied sciences, go to Celo.org.