NFTs and Marketing: What Businesses Need to Know

Why Consider Creating NFTs for Your Business?

The most obvious reason for businesses to get into the NFT space is to create another stream of revenue. Even for those businesses that plan on giving away their NFTs for one reason or another, being able to take advantage of the secondary marketplace—where holders of the NFTs resell them to someone else—generates revenue.

Additionally, getting into NFTs grants businesses exposure to an entirely new audience; something that many businesses are starving for today.

As most small business owners and marketers know by now, successful marketing means building and serving a community. And in many ways, NFTs give businesses another way to build a community. Therefore, the skillset and requirements needed to make your NFTs a success overlap, at least somewhat, with those needed to build a community anywhere else online.

These communities are proving to be game-changers. As social media has become increasingly ingrained in our lives and businesses, the competition for organic reach has become a struggle for many online marketers and businesses.

NFTs are still new enough that not everyone has jumped into them for their business. And yet they're providing the same marketers and businesses a new way of creating and connecting with their community without having to fall victim to a platform's algorithms or relying on organic reach from a feed.

If you're interested in getting into the NFT space for your business, here are some important considerations to keep in mind.

#1: Understand the Financial Side of NFTs

Before diving into buying and selling NFTs, you should try to learn more about the business side of these investments.

In many ways, launching an NFT resembles launching a new business. There are plenty of ways in which that new business can and sometimes will fail. Whenever you purchase an NFT, you are taking on a risk that the NFT may also fail. The community may fold, and as that community sells or trades off their NFTs, the value may go down.

This is an important aspect to remember—the community determines its value through that secondary market. You can release an NFT for free, handed out to people in any way you see fit, and when they sell or trade their NFTs, they'll assign a value to your community. The higher the sales price, the higher the floor rises.

When you're buying and selling NFTs, pay close attention to what makes an NFT go up or down in value. As we said, the community determines its own value in that sales price as they sell and trade your NFTs. But if you don't know how to keep them invested and wanting not only to purchase your NFTs but also to sell them at a higher price, then you may struggle in that secondary market.

#2: Educate Your Audience About NFTs

One of the best things Gary Vaynerchuk did before launching his NFT was to spend a month or so on Twitter educating his audience about NFTs first.

If you're planning on leading your business into the NFT space, start by educating your audience on what an NFT is and how you're integrating it into your services and community. Because NFTs are still very new, many people are still somewhat skeptical about what an NFT is, what it does, and what they can do with it. They don't yet know what a wallet is, how to set up a wallet, or how to keep their funds secure once everything is set up.

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As the business owner and community leader in your NFT space, you'll want to take time to show your audience where to go to create their wallet, how to create their wallet, and explain to them what NFTs are before you even launch your NFT. This will help your audience accept and move into the NFT space with you.

If you don't do this extra step to prepare your existing audience for the advent of NFTs inside your business, then you risk losing them right as your NFT launches. Instead, you want them primed and ready to buy into your NFT and help build your community by buying into it. And that requires that your audience understand the value of NFTs in general but also the value of your specific NFT and what they're going to get out of it.

#3: Explore the Community Aspect of NFTs

As we said earlier, NFTs provide creators and business owners with another opportunity to build a community with their audience.

The bulk of the NFT community, as of right now, is on Twitter and Discord. There are many overlapping correlations between building a community on Twitter or Discord and doing so on more traditional social media platforms like Facebook or Instagram but there are some things to keep in mind with the current NFT community.

For example, many people inside the NFT communities right now work anonymously, meaning that they don't use their real names, real photos, or public branding. This is opposite from platforms like Facebook, which requires your real name, or Instagram and TikTok, which rely heavily on seeing the face behind the brand.

Inside the NFT community, they rely mostly on the merit of what you're bringing to the community, your connection, and the conversation. There's no judgment based on followers, platform size, or how nice your photos look. And this takes some getting used to, especially when the majority of social media marketing over the past decade or so has centered on things like showing the face of the brand because audiences prefer to connect with a person rather than a brand.

That still holds true. People do prefer to connect with other people over things like logos. In regard to Discord, the connection comes through that conversation rather than through the picture.

#4: Build a Long-Term NFT Strategy for Your Business

One of the foremost things that any marketer or business owner should keep in mind when they start creating NFTs is the word utility. What is the utility behind that NFT? What can it do? What can it unlock? What kind of access does it grant to the person who holds it?

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So many businesses are as excited about NFTs as we are and can't wait to create their first project but they're skipping this one vital step. So they launch the NFTs without a plan, a solid marketing strategy, or any proven techniques for how to let their communities know about their NFT or how they can buy into their NFTs.

Just as when entrepreneurs launch a new business, without these things in mind, NFTs can fail at the same rate as new businesses. Often, when an NFT fails, it's because the creators didn't have the capacity or plan to build and support the community they'd need to support the NFTs.

These large NFTs would launch and receive all kinds of hype and excitement. Their community would explode, and then the developers would disappear, taking all engagement and information with them. What was left was an empty community of people who didn't know what was going on or understand what they had access to. So they started selling off or trading back their NFTs at declining values.

In the case of NFTs, the value of the community is determined by the community in that secondary market, when the community members are trading or reselling their NFTs. If you don't have a plan to support the community members, they're not going to value the community.

If you create an NFT from scratch, then you'll want to try to approach it the same way you would approach creating a brand. We tend to think of NFTs as projects, and on some sites, the NFTs are even referred to as projects. However, a project by definition is a short-term endeavor. A brand, on the other hand, is far longer term. You don't create a project to stick around for the next 5-10 years but you do create a brand to stick around. So you'll want to use that same mindset as you approach your new NFTs.

And if you already have a brand but you're looking to add an NFT component to it, think about what utility your NFT will add to your existing brand. What will it do for your customers, what sort of value will it add to your audience, and how will it make your community stronger?

Finally, as you sit down to plan your NFT, pay special attention to your roadmap. Your roadmap is a transparent action plan for the vision of your NFT. It gives buyers a chance to see what you have planned for the funds raised through your NFTs and allows them to sign on to complete your vision.

#5: What to Expect in the Future for NFTs and Business

NFTs are here to stay. Exactly how ingrained into our society and everyday life they become remains to be seen. However, their sheer potential has businesses from almost every industry already looking into how they can incorporate NFTs into their brands. This is going beyond digital assets and memberships into wearable digital assets and even physical products.

Right now, the NFT community is centralized on Twitter and Discord, but as more people learn about and become involved in NFTs, even that may change. We may soon see NFT discussions happening more on Facebook, TikTok, and other social networks outside of Twitter and Discord.

They may not even be called NFTs in the future. It's still so early that no one really knows in what direction NFTs and the metaverse will take as more people adopt and use them. Within a short number of years, the need to educate your audience for a prolonged period of time about NFTs may also change, as they become more knowledgeable. Kind of like the internet today.

Other Notes From This Episode

• Check out Decentraland, NBA Top Shot, MetaMask, Coinbase, Discord, Ethereum, Lazy Lions, VeeFriends, OpenSea, Bored Ape Yacht Club, CryptoPunks, Cool Cats NFT, and The Sandbox.
• Connect with Michael Stelzner at @Stelzner on Instagram.
• Watch the interviews on the Crypto Business YouTube channel.