Why Token-Gated Communities Are the Future of Loyalty

For brands
Blockchain & Crypto • Aug 8, 2023 • By Eric Liefting • 7 min read
Token-gated communities for Loyalty.

Enter the era of token-gated communities and witness the revolution in loyalty programs. Discover the disruptive potential of this groundbreaking shift now.

Introducing token-gated communities

Explore how these communities function and how blockchain-based tokens allow for this latest revolutionizing approach to transform the loyalty industry.

What is a token-gated community?

A token-gated community is a group or ecosystem where access to exclusive benefits, privileges, content and more is granted only to individuals who possess specific tokens. These tokens represent a digital asset or membership. 

  • The average global market growth rate of online communities is 13.9% CAGR

  • 85% of the brand owners say that having a branded online community provides greater trust among the audience

  • 90% of the brands told that they use the community members’ suggestions to improve their products & services

Source: Bloggingx

How do they work?

Token-gated communities utilize tokens, often utility- or non-fungible tokens (NFTs), to control access and reward participation. By owning the required tokens, individuals gain entry into the community and unlock a range of unique experiences, rewards, interactions and more. This service is referred to as NFT token-gating and is making a name for itself in the loyalty industry by showing many potential opportunities for improving loyalty loops globally. Besides that, one of the main reasons why this innovation is starting to get traction is that the technology seems to tackle the top frustrations online community managers face, ultimately unlocking full community marketing potential.

Top frustration for online community managers

What does a token-gated experience look like?

A token-gated experience refers to the unique interactions and privileges that individuals gain by being part of a token-gated community. This experience extends beyond the traditional one and provides benefits of loyalty programs many businesses have yet to discover. 

Token-gated access

Token-gated access grants members entry to exclusive areas, services, or features that are inaccessible to the general public. Whether it's a VIP lounge, a private forum, or premium customer support, it ensures that community members receive a significantly higher level of service and attention. 

Token-gated benefits

Token-gated experiences combine a seamless customer journey with exclusive benefits like member-only events, early product releases, personalized content, and premium customer support - to name a few examples. By using tokenized economies, the rewards can be tailored to transactional customer behaviour. 

Token-gated content

Token-gated communities provide members with access to exclusive content such as articles, videos, tutorials, or behind-the-scenes footage. This content is reserved for community members, creating a sense of exclusivity and fostering a deeper connection with the brand or creator.

Token-gated events

Token-gated events offer unique opportunities for members to attend exclusive gatherings, workshops, or virtual experiences. Whether it's a product launch party, a meet-and-greet, a live Q&A session, an online webinar or an easter egg, token-gated events ensure the right people are in the right place. It ensures you are putting your efforts in the right place, with the right people.

How does a brand community affect the customer experience compared to a social media community?

How token-gating adds value to loyalty programs

The blockchain technology upon which token-gated communities are built enables a variety of advantages. Here are the most important ones:

Traceability & accountability
Through the transparent administration of transactions that the blockchain provides, traceability and accountability are two key components.

User verification
To ensure the legitimacy and commitment of members a solid user verification process is required, to which blockchain and tokenization are crucial.

Value exchange
By incentivizing participation with the interact-to-earn model, and spending with rewards that represent a higher perceived value, community members are much more likely to stay active within the program. 

Access control
Protecting sensitive content and features is essential to preserve their value to community members. Robust access control ensures this exclusivity.

Increased security 
Brands can efficiently mitigate spam, bots and fraud, which is essential to keep the ROI high - leaving more room to reward members.

By leveraging the tracking potential of blockchain-based loyalty rewards, more accurate targeting and experiences can be provided which ultimately generate better results for less.

token-gating adds value to your online community efforts through a token-gated community

The role of blockchain technology explained

Essentially, the most important added value is to improve the experience for businesses as a consequence of an improved experience for consumers. 

Increased transparency and trust

Blockchain provides increased transparency and trust for both businesses and consumers. Transactions and interactions within the community are recorded on the blockchain, creating a transparent and auditable system. This transparency enhances trust among community members, as they can verify the authenticity and integrity of the token-gated experience.

Immutable transaction records and smart contracts

Token-gated communities leverage the immutability of blockchain to establish a tamper-proof record of transactions and interactions. Smart contracts, self-executing agreements written on the blockchain, govern the rules and conditions of the token-gated community. This ensures that rewards, benefits, and privileges are distributed automatically and without the need for intermediaries.

Unmatched personalization 

Leveraging token-gated communities for loyalty programs allows programs owner to offer a more personalized and immersive experience. Instead of generic rewards, members of these communities receive exclusive privileges, access to limited edition products, member-only content and more.

True innovation occurs when a development benefits all stakeholders involved - Tim Cook, CEO of Apple inc.

How to start now

As you are probably well aware, token-gated communities are far from mainstream yet. We’ve spotted the trend in advance, and know exactly what to do to gain an edge ourselves and to get one for our partners. 

Deploy your token-gated community

We empower businesses to build and deploy their own token-gated communities. Businesses can create token-gated communities using our branded loyalty programs, deliver mobile push notifications to increase user engagement and much more. Through e-commerce integrations, brands can now unlock the full potential of token-gated communities seamlessly - allowing for a new generation of loyalty programs for e-commerce.

Improve mobile engagement with branded loyalty programs

Through Crowny's web3 loyalty platform, businesses leverage mobile-first blockchain loyalty programs in the Crowny App to engage with their customers. Engagement can be improved by incentives for engaged customers through targeted push notifications, for example. Distribute exclusive rewards, send personalized content or promote upcoming events - you are able to tailor the experience to the specific needs of your community members.

You may have guessed it already: many of the processes within our platform make use of token-gating. This cutting-edge approach enhances the customer experience. It also increases participation in the token-gated community, ultimately improving customer lifetime values and ROI for our partners.

benefits of branded online communities

Why you should start today

Traditional loyalty programs have come a long way from simple punch cards and discount coupons. Businesses have recognized the importance of cultivating loyal customers and have continually evolved their loyalty strategies. Token-gated communities represent the next phase in this evolution, providing an enhanced and engaging loyalty experience. You can be among the first to implement the next generation of loyalty program features. 

By embracing the power of token-gated communities with Crowny, you can stay ahead of the competition, deepen customer relationships, and build a thriving community of loyal supporters.

Sign up for early access to our platform now.