The 4 skills required for crypto-marketing success
Part four of our blockchain series is all about the skills crypto-marketers need to impact blockchain-based token economies: familiarity with technology and behavioral economics, and emotional intelligence.
The Internet, social media, and mobile technologies have all fundamentally affected how marketing works. Blockchain will do the same. That means that marketers in a blockchain word, or “crypto-marketers,” are going to have an entirely new set of capabilities.
Crypto-Marketing is the process of understanding what a customer values so well that it can be embedded into a crypto-token protocol, which will appreciate in customer utility as network effects take a hold spurred on by organically incentivized word-of-mouth.
That’s a lot. Let’s break it down.
1. Determining what a customer values
At the heart of business legend Peter Drucker’s maxim is how people value something.
Let’s say we both need to get to London. You’re going on vacation, I’m going for a business meeting the next morning that could result in a $10 million contract, which I won’t get if I’m not there. Unless you really value your vacation time, the value of the last seat on the last flight out of the airport on the last flight to London that day is going to be much higher for me than for you. That same flight the next day (or when I’m on vacation and you’re not) has a totally different value.
That blockchain-based tokens are programmable is what potentially gives them so much power. We can assign attributes to a token, which can then deliver the value that our end users want.
For example, think about decentralized cloud backend SIA. Those using it for storage want high amounts of storage, reliability, availability, security, and decreasing costs over time. Those renting storage want to turn a profit and see the value of their SIA crypto-token increase.
One thing they do is “burn” the tokens of those renters who don’t keep their hard drives available, which they obtained because it is proof-of-stake.
The reduction in supply increases the value of the tokens still in the system and also incentivizes people to keep their computers online thus delivering greater customer satisfaction. In turn, there’s an increase in demand, leading to further price appreciation of the token. This brings in more supply seeing an opportunity, thus creating a lower price and more reliability.
All of rules for what people value need to be embedded into the token at the outset or added through a decentralized governance model.
Using the example above, the same customer now has more providers, greater reliability and lower cost. That means that the same token which could buy 1 unit of storage can now by 1+n unit of storage. Getting more use out of the same asset is the definition of increased utility.
3. Getting network effects to take hold
At the beginning, every project needs a jump start, but the sooner that the positive feedback loop with what 1confirmation founder Nick Tomaino calls “network ownership effects” begins, the better.
Tokens embedded into a product create the strongest network effect ever seen before. I call it the network ownership effect. pic.twitter.com/2siMHmAm6a
The obstacles and opportunity for the crypto-marketer here is to think about how frictionless the process is of getting new users on board. SIA and Storj are great, but there are still some challenges in setting up, including downloading software, obtaining tokens, set-up, configuration and invariably, tech troubleshooting.
4. Organically incentivizing word-of-mouth
Blockchain represents a challenge to the supremacy of centralized institutions. The same phenomenon has already been in play in the world of marketing over the last 10 to 15 years, particularly with the explosion of social media. Trust in brands continues to decrease, in general, and skepticism about advertising means that people trust their friends even more.
Peer-to-peer marketing is just word-of-mouth by another name.
Look at decentralized events platform KickCity. Today, you might send a link to a friend for a concert you want to attend. Maybe you have an affiliate code that gets your friend a discount and possibly, a bonus for yourself. In the KickCity model, you buy a ticket for a concert and then share the event with your friend. If she buys a ticket, you both get KCY crypto-tokens, which can then be redeemed for tickets. The event promoter loves it because the cost of customer acquisition has gone down and the middleman, like Ticketmaster or Eventbrite, is disintermediated.
Organic virality comes in different ways, but in connecting people’s passions (events they are attending) with economic reward for the value they bring to the activity (referring their friends), you create a scenario for the kind of word-of-mouth that will help.
Without these skills, they won’t be able to take their learnings about people and translate them into language that developers can understand. At the same time, they will also have greater emotional intelligence and empathy skills in order to really understand people and what they value.