Beyond HODL: Elevating User Engagement and Retention in Web3

Web 3.0 is here! Like its predecessor (Web 2.0), Web3 redefines everything we thought we knew about the customer experience. User engagement and retention have always been a struggle for digital businesses. Given the ease of moving from one platform to another, churn is part and parcel of internet commerce. Nonetheless, brands have worked tirelessly to maximize user engagement through the concept of customer success: a proactive approach to ensuring customers see definite benefits from brand loyalty.

Common tactics include long-term subscription discounts, impeccable customer service, and monitoring customer outcomes. Such tactics, however, belong in the era of Web 2.0. Back when internet users didn’t have complete control of their data. Now decentralization and data ownership are the name of the game.

So, how can businesses maximize user engagement and retention in the next era of the Internet?

In this article, we’re exploring the cutting-edge ideas and technologies being developed to ensure businesses create a sustainable and loyal user base—namely, tokenization, gamification, and community building.

Tokenization

What is Tokenization?

Listen to enthusiast Web3 advocates, and you’ll hear lots of talk about decentralization and personal control. Not so much about tokenization. That’s a shame, as it’s a key component of the new system.

Tokenization’s meaning: in a nutshell, tokenization refers to the process of converting real-world or digital assets into tokens stored on a blockchain.

Even more confused? Well, the conversion isn’t literal – a token is another term for a digital representation. A token can represent almost any asset: cryptocurrencies, real estate, securities, intellectual property, and even ownership rights to physical assets.

The genius of a token is that it carries a unique identifier and relevant metadata associated with the asset. As part of a blockchain, the token cannot be edited or modified without a record.

That means that tokens ensure the transparent and traceable transfer of ownership with no risk of fraud. Moreover, tokens allow assets to be divided into smaller units, enabling fractional ownership; and because tokens are easily transferred and exchanged between blockchain networks or platforms, it incentivizes interoperability. Everyone must work with everyone for the system to work – no more siloization.

How Tokenization Drives Customer Engagement

Not sure how tokenization drives customer engagement and retention? Here’s how:

Loyalty Programs. Creating digital tokens customers can earn and redeem for rewards and discounts is an ingenious way to encourage specific customer activities. For example, customers who provide valuable feedback, contribute to the platform’s growth or actively participate in community activities are more incentivized than ever.
Token Economies. Because of the principle of interoperability, tokens earned on one platform can be used elsewhere. Conventional marketers will tell you that’s terrible – after all, traditional loyalty programs lock customers into a specific ecosystem. Not so. Interoperability increases the value of a token, further incentivizing participation.
Exclusive Features and Services. Creating features that grant customers access to premium features, services, or products within the Web3 space is a brilliant way to spark customer engagement. Such exclusivity incentivizes customers to acquire and hold tokens, boosting long-term retention.

Gamification

Gamification is precisely what it sounds like—introducing elements of a game into everyday interactions. Who doesn’t want to have fun? In fact, businesses relying on gamification are seven times more profitable than those that aren’t.

Gamification and Web3

We’ve all played a video game we just couldn’t put down. The logic is simple: once you’ve started, you don’t want to stop. Web3 companies can harness this psychological effect to promote continuous engagement.

Here are some ideas:

Gamified Onboarding. To the average customer, Web3 is a lot to take in. By simplifying the onboarding process, game elements can smooth this transition, rewarding customers as they take the correct action and making the learning process fun and engaging. Consider creating interactive tutorials which rewards as users master the basics of blockchain, smart contracts, and other Web3 technologies.
Incentivize Interaction. Normally, when we get rewarded for an action, we keep doing it. Combining tokenomics with gamification allows businesses to compensate customers for performing a desired action. Whether engaging with content, completing transactions, or referring others, tokens (or even NFTs) are a genius way to keep customers coming back.
Progress and achievement. Reaching certain milestones or achieving status within a community shouldn’t go unnoticed. If you want people to stick around, you need to reward them – just as a video game rewards players as they power through missions or master certain objectives. Allow customers to unlock new features, grant them new status, or credit them some tokens.

Community Building

Community building in Web3 is more critical than in any other version of the Internet. Given the inherent decentralization, businesses are unlikely to succeed unless they are open to community feedback, assistance, and growth.

Decentralization doesn’t mean an absence of leadership, however. Rather, businesses must shape and build communities by creating the right incentive structures. We’ve already hit on some of these points: e.g., using tokens and gamifying certain actions that promote community building is a fantastic place to start.

Expect your community to deliver feedback and support to developers, to drive adoption and help scale, and to be your evangelists, promoting and advocating to others.

Not sure how to get started? Check out these ideas:

Launch Events. Run events that allow users to meet, network, and grow the community. Such events are fantastic places to give ownership and listen to feedback.
Airdrops, bug bounties, and competition all work to encourage individuals to improve the overall product or service experience. If you’ve got a problem, don’t feel like you’ve got to solve it alone – open it up to your community. After all, everyone benefits from the solution.
Create Clear Rules. No one dictates who should drive where or what Wikipedia articles to write. These decentralized systems work because everyone knows the rules. Having clearly defined rules ensures everyone is treated equally – fairness is a key part of a community.

Tap Into Web3’s Potential for Customer Retention

Tokenization, gamification, and community building are just some of the incredible new features promoting ever-greater customer engagement and retention in the new age of Web 3.0.

Through tokenization, assets become digital; customer engagement gains a new dimension, and the customer’s role within an ecosystem morphs from a mere user to a value-adding participant. Gamification flips the script on engagement, transforming everyday interactions into thrilling, irresistible experiences. Meanwhile, community building holds the key to nurturing a loyal, self-sustaining user base.

Welcome to the future of Internet interaction!

Ready to tap into the power of Web3 for unparalleled customer retention? Consult with PathSage’s Web3 experts and discover how tokenization, gamification, and community building can drive lasting user engagement and loyalty. Start your journey to success in the decentralized world today!

Written by Irene Patrikios Clark,

Web3 Customer Success Specialist.

Sources:

https://www.withblaze.app/blog/7-strategies-to-boost-user-engagement-in-web3-crm-platforms

https://www.zippia.com/advice/gamification-statistics/

https://www.recur.com/blog/web3-is-changing-the-future-of-customer-engagement

https://moralis.io/user-engagement/

https://www.surgewomen.io/learn-about-web3/how-to-build-a-web3-community

https://landvault.io/blog/web3-community-building

https://101blockchains.com/building-web3-community/

https://news.verida.io/the-web3-tokenization-principle-5977afbbb614

https://tokenminds.co/blog/web3-development/tokenization/