Demystifying Cryptocurrencies: Promise and Potential Lead to Growing Appeal
Consumers control the cryptocurrencies that they own and have 24/7 access to them. While cryptocurrencies have historically appealed mostly to techies, that’s changing, opening up new ways for marketers to extend their brand reach and build new market share.
CAPITALIZING ON THE COOL
Depending on the type of products or services they provide and the market they are attempting to reach, companies can use cryptocurrencies to position themselves as cool; accepting them can lend a marketer a certain degree of prestige, especially among more tech-savvy consumers. While an aging Baby Boomer audience interested in vacation rental properties might not be interested in, or even familiar with, cryptocurrencies, digital natives—generally considered to be Millennials and younger—more than likely will be.
The community around cryptocurrency is highly engaged, Fast says. “They’re a very enthusiastic, engaged, and vocal community. If someone is a holder and supporter of Bitcoin, and they discover that their favorite merchant now supports Bitcoin transactions, it’s very likely—much more likely than you would see in other kinds of communities—for them to actively share and push that development to other people they know,” he says. “There’s a kind of grassroots sort of community power to some of these things.”
One example of just how passionate and engaged—and young—these communities can be is MORE, a Los Angeles-based cryptocurrency-backed nightclub in Hollywood. Peter Klamka, the founder of MORE, which was first launched in Las Vegas at the Bellagio, says, “We created an entire membership club around crypto. Crypto was the marketing approach to start. We have grown from it to include non-crypto members.”
But niche-focused nightclubs and technology firms aren’t the only companies already accepting Bitcoin and other cryptocurrencies. Some very familiar and broadly focused consumer companies, including Starbucks, Nordstrom, and Whole Foods, also accept some cryptocurrencies.
Is this a path that you should consider, and if so, how can you best communicate and educate your current and prospective customers?
First, advise the experts, avoid the tendency to attempt to overexplain. While the technology that makes cryptocurrencies like Bitcoin possible is very complex, Traidman stresses that marketers don’t really need to educate the public on how it works. “The business opportunity for marketers is to educate the public on its practical use cases as a potential safe haven and global currency, rather than focusing too much on the underlying technology,” he says.
He and others note that companies did not need to spend time educating their customers about how credit cards, digital coupons, or services like PayPal and Venmo work. The biggest mistake that marketers can make, Traidman says, is focusing on “advertising the technology rather than the practical uses as a valuable, peer-to-peer cash system owned by the people.”
“Now accepting [insert name of cryptocurrency]” is a simple and obvious way to start down this payment pathway. And, as Fast notes, highly engaged crypto-communities, especially those that are already part of your customer base, are likely to eagerly help you spread the word.
THE PROS AND CONS OF CRYPTOCURRENCIES
For marketers, the “cool” factor is likely one of the big benefits of accepting cryptocurrencies. But there are other benefits.
David McCarville is an attorney in the Phoenix offices of Fennemore Craig and a thought leader in blockchain and cryptocurrencies. He works with clients on navigating smart contracts and international implications, including R&D tax credits and real estate and supply chain applications. “Cryptocurrencies are capable of providing tremendous value and benefit to marketers across a variety of use cases,” he says. “The first would be to position your product or service and market directly to the existing cryptocurrency networks, such as existing traders or holders of Bitcoin (BTC) or Ethereum (ETH) as just two examples. The second would be to identify opportunities to use cryptocurrencies to replace or enhance customer loyalty rewards programs.”