To Evan FensterCerro Foundation
Since 1996, Atlas Café Coffeehouse in San Francisco’s Mission District has been a neighborhood staple, providing a comfortable place for the local community to eat, drink, socialize and work. Unfortunately, the pandemic has hit the Atlas Cafe hard — far fewer of its “regulars” as stay-at-home orders disrupted typical routines. occurred in While most businesses have resumed operations, some are struggling to rebuild their regular customer base.Atlas Cafe was no exception.
UPenn students working as Atlas customers during the summer and as summer interns: Cerro FoundationAs a research and innovation team at , and having seen how NFT projects build brands and communities, I wanted to explore how NFTs can help local businesses. This exploration led to an NFT-backed rewards pilot program that simulates how a neighborhood coffee shop would market, onboard, manage, and implement an NFT collection used for rewards.
To run the pilot, we received funding from the Celo Foundation and support from our research and innovation teammates. This ultimately successful pilot served as a proof-of-concept for a distributed reward protocol called Loka, which is currently in development.
Atlas Pilot concept and design
In May 2022, I began researching how NFT-backed rewards can help businesses generate loyal customers, increase revenue and brand awareness. I have found that NFT collections can be a great tool for developing and managing customer loyalty. After all, long-term reward programs for coffee subscriptions have been tried and tested, and many brands are already using NFTs to capitalize on desirable customer behaviors. However, in my research, I found no examples of him combining these two strategies.
The use case design is very simple. Businesses offer their customers NFTs from their branded collections to increase loyalty. By offering her NFTs that reward consumers with a small amount, the company induces consumers to visit more often and pay enough to cover the cost of rewards, increasing overall profits. expected to increase.
The Atlas Cafe NFT collection was deployed on the Celo blockchain and featured the Atlas mascot designed by Atlas Cafe and the Celo Foundation. Each NFT is collectible, tradeable, and transferable, allowing the owner to redeem $4.50 worth of coffee for free each day during his 10-day pilot.
On July 25, 2022, I launched a 10-day Atlas Café pilot, inviting 20 participants I met at the café to participate. We sent NFTs directly to a pre-specified wallet address for each participant. During the pilot, I was able to redeem one free Atlas coffee per day by showing my NFT to a barista. Since NFTs live on the Celo blockchain, participants will also be able to view, trade, sell and transfer them using existing tools. For example, you can sell NFT rewards from your mobile phone. Tofu NFT.com.
To inform them of the results of the pilot, participants were given a form with their coffee and asked to list the cost of any other purchases they made. It was held in.
Atlas Rewards pilot results
After the 10-day pilot ended, data was collected and analyzed. The results are as follows.
NFT-based rewards helped Atlas Cafe increase visits and overall revenue. Pilot participants visited the cafe more frequently and purchased additional items there. Before NFT-based rewards, one of her participants visited her once per month at Atlas Cafe, spending an average of $5 per visit. After being paid, he made a total of five visits during his ten-day pilot, spending a total of about $28. Another participant mentioned similar pre-pilot spending, in which he made three visits during the 10-day pilot, and in total he spent $24.
Pilot participant Doug Qian said: “During the 10-day pilot, I stopped by Atlas almost every day for coffee, and it became a fairly important part of my morning routine. prize.”
Atlas Cafe has built brand awareness through on-chain earned marketing and word of mouth. Atlas Cafe’s brand awareness grew as pilot participants shared their experiences. They became obsessed with being able to keep his Atlas Cafe NFT on-chain in their wallets and started telling others about the pilot. This word-of-mouth marketing brought seven more people into the pilot in the first few days.
The NFT collection has created a global reach for local cafes. Of the total 27 participants, 4 piloted from Uganda, Africa. I didn’t get a free cup of coffee, but I signed up to be part of the Celo and Atlas Cafe communities. By creating this collection, Atlas Cafe was able to achieve global reach with minimal marketing costs.
On-chain tools offered opportunities for other use cases. One participant wanted to transfer rewards from the original wallet to another. The reward was represented as her NFT, so it was seamless. Another participant who was out during the 10-day pilot put his NFT on the open market and made a profit of $7. The new owner was then able to join his pilot Rewards at minimal cost.
Atlas Cafe owner Felipe Collin said: “After COVID, businesses all over the world started looking for ways to engage with their customers and provide added value. I’ve seen – people coordinated to have coffee as a group. The NFT loyalty program is a great way to engage with customers and build community.”
Atlas Cafe benefited from a pilot of the NFT-backed rewards program, but additional functionality is needed to create a fully developed protocol for business use.
- Automate reward redemption and consolidate data collection. Like any cafe, Atlas is busier at certain times than others. For that and other reasons, Atlas Café staff often neglected to ask customers to complete a form for each transaction. While this limited the amount of authoritative data we collected at our registers, we were able to supplement our self-reports with on-chain data, interviews, and surveys to avoid disruption of future checkout processes. And by automating rewards redemption and data collection, you can ensure a smoother checkout experience regardless of your business type.
- Extend this model to other businesses (large restaurants, local grocery stores, etc.) to increase vertical market engagement. statistical survey Data announced in June 2022 suggests that consumers, on average, participate in 16 or more loyalty programs, but participate in fewer than 8 of them. As we saw in this pilot, using her NFTs in loyalty programs allows consumers to engage more with brands.
- Develop additional on-chain NFT use cases. Use cases for NFT holders could include on-chain voting. For example, Atlas Cafe can present on-chain proposals to introduce new drinks that only NFT holders can vote for. The on-chain voting process will provide useful consumer data to Atlas while providing utility to NFT holders. Additionally, a brand can host networks and other events exclusively for his NFT holders.
Small businesses like Atlas Cafe can seamlessly generate NFT-backed rewards that help improve customer retention while increasing profits. Once the distributed reward protocol Loka is developed, it will help even the smallest businesses to integrate and innovate with web3 technology.
To learn more about Celo and its mission to create a future in which people everywhere thrive through financial inclusion, a healthy environment and connectivity through innovative technologies, please visit: Celo.org.
The success of the Celo NFT-backed rewards pilot in San Francisco was originally published on The Celo Blog on Medium.