Cryptocurrencies like Bitcoin have rapidly gained mainstream recognition and adoption over the past few years. As digital currencies continue to increase in popularity, more brands have started to take notice and experiment with creating their own branded cryptocurrencies to capitalize on the hype.
From Kodak to KFC, companies are launching branded “tokens” – digital assets similar to crypto coins – as part of marketing campaigns, to boost customer engagement, and facilitate blockchain-powered commerce. However, creating a branded cryptocurrency requires thoughtful strategy rather than blindly chasing trends if brands want to leverage them successfully.
As quoted by marketing thinker Tereza Litsa:
“It’s useful to explore which opportunities can bring the best results for your business. Spend some time to evaluate the reasons you need to join the hype of a trend.”
Why Brands Are Launching Cryptocurrencies
There are several key motivations driving more brands to launch their own cryptocurrencies:
To Facilitate Payments and Commerce
Some companies are leveraging cryptocurrency technology to power payments in a faster, more secure manner as well as incentivize customer loyalty. For example:
- Kodak launched KodakCoin to facilitate payments to photographers for image rights and intellectual property.
- Burger King Russia created Whoppercoin to encourage repeat customer visits and function as a loyalty rewards program.
To Engage with Crypto Community
Other brands are experimenting with cryptocurrency primarily as a way to creatively engage with the crypto community and early adopters, even if they don’t fully understand the technical complexities behind digital currencies:
“Sure, we don’t know exactly what Bitcoins are, or how they work, but that shouldn’t come between you and some finger-lickin’ good chicken.” – KFC Canada
For example:
- KFC Canada launched a bitcoin bucket, only available for purchase with bitcoin, as a viral marketing campaign targeting crypto enthusiasts.
- Musician Björk partnered to reward album buyers with crypto tokens in an experimental promotion for crypto-savvy fans.
As Part of Marketing Campaigns
Some brands are incorporating cryptocurrencies into larger marketing campaigns – such as influencer programs – as a way to drive interest and engagement:
- Influencer marketing platform indaHash allows influencers to create their own “coins” to incentive their followers and fans to perform desired actions.
Benefits and Risks for Brands
Brands can realize significant benefits but also face notable risks when experimenting with cryptocurrencies.
Potential Benefits
Launching a branded cryptocurrency as part of a focused marketing effort can provide several upsides:
Increased awareness and publicity:
Even announcing plans to create a branded crypto token often generates headlines which spreads brand awareness. For example, Kodak’s stock price jumped significantly when they announced the KodakCoin ICO.
Innovation and freshness perception:
Being an early adopter of new technologies like blockchain gives brands an aura of innovation and positions them as forward-thinking.
Customer engagement and loyalty:
Gamified loyalty programs and rewards powered by cryptocurrencies can boost engagement, especially among younger demographics.
Potential Risks
However, there are also risks for brands exploring cryptocurrency:
Reputation damage if crypto fails:
If the cryptocurrency ends up not being viable or secure long-term, it could negatively impact overall brand perception.
Overemphasis on crypto experiments:
Putting too many resources into chasing crypto trends could cause brands to neglect core products and marketing efforts that drive revenue.
Crypto Implementation Tips for Brands
If executed deliberately, integrating cryptocurrency can unlock fresh marketing opportunities. Here are tips for brands:
Set Goals and Make a Plan
Outline concrete objectives you want to achieve and formulate a cryptocurrency strategy that maps to those goals.
Don’t Neglect Current Efforts
Continue to devote sufficient resources to existing products, campaigns and platforms that are working rather than only chasing experimental trends like crypto.
Evaluate Ongoing Success
Analyze performance indicators tied to your crypto implementation goals to determine what’s working well and what needs refinement. Adjust strategy accordingly.
Conclusion
Experimenting with branded cryptocurrencies allows marketing innovation for brands if undertaken strategically, but blindly following crypto hype without clear goals poses unnecessary risks. As cryptocurrencies permeate mainstream finance and culture, more brands are likely to launch their own tokens – but the ones that will maximize benefits are those that incorporate crypto to align with practical business objectives beyond just garnering temporary attention.
FAQs
What are branded cryptocurrencies?
Branded cryptocurrencies are digital assets and tokens created by commercial brands to leverage blockchain technology for a business purpose like facilitating payments or boosting customer loyalty and engagement through rewards programs.
Why would a brand create its own cryptocurrency token?
Main reasons include capitalizing on the crypto hype to gain publicity, using crypto to incentivize desired customer behaviors, powering commerce through crypto payments, and portraying an image of innovation.
What risks do branded cryptos pose for brands?
Major risks are that the cryptocurrency fails from a technical or adoption standpoint, sparking backlash and reputation damage, or that brands over-invest resources into crypto experiments rather than focusing on core products.
How can brands leverage cryptos successfully?
Tips for effectively leveraging branded cryptos include setting clear goals, ensuring crypto aligns with practical business objectives, dedicating sufficient resources to current efforts alongside crypto experiments, and continually evaluating performance.
Will more brands launch their own cryptos in the future?
As cryptocurrencies become more mainstream and blockchain technology matures, it’s highly likely that more brands across industries will look to get involved with branded cryptos in coming years. However, many early branded crypto experiments have underwhelmed. The brands able to create long-term value from branded cryptocurrencies will be those that incorporate them in a strategic, targeted manner rather than treating them as marketing gimmicks.