Timothy A. Koonce: The future of marketing in a blockchain world

marketing in a blockchain world

By Kiki Schirr, {grow} Contributing Columnist

The world is going blockchain.

Coinbase, a cryptocurrency exchange, raised at a $1.6B valuation in August. Last week the head of the IMF, Christine Lagarde, referred to the use of cryptocurrencies as “dollarization 2.0.”

But blockchain isn’t only for cryptocurrencies. Blockchains can be used for a variety of purposes, including forming contracts, keeping track of ownership, distributing data, and even marketing.

As companies adopt blockchain technologies they are rapidly decentralizing tasks and authority. While a corporation answers to both shareholders and customers, in a decentralized company the customers are the shareholders. How will this change the face of marketing in the future?

First a refresher: what is a blockchain?

Essentially, blockchain is a database. It forms a public ledger of transactions that have been cryptographically encoded, or “hashed.” Periodically, all new transactions are written to a “block,” which is then linked back to the old block with a hash, like a chain.

Blockchains are distributed, which means they are kept on different servers and devices around the world. Because of the duplicate nature of each transaction, it is nearly impossible to alter or hack a block, which is appealing to businesses today.

In addition, each transaction is timestamped, verified by multiple users, and encrypted. It is a very secure system.

Blockchains are decentralized, meaning they don’t have centralized governing authority. Transactions are governed by incentivizing a system of verification within the community.

What then is a decentralized company?

Much as a clockmaker laboriously assembles a timepiece that will last a lifetime, a blockchain requires little upkeep after it is launched.

Imagine Uber without Uber.

The concept of a decentralized company is to cut out any unnecessary middlemen. In the case of ride sharing companies, such as Uber or Lyft, a blockchain system of contracts could connect you directly with a car owner to get a ride. In turn, you would pay the driver directly, without a parent corporation like Uber taking a cut (in theory — in practice it varies).

Often, the companies behind blockchain systems are nonprofit institutes winding the clock and making small changes to the system as necessary.

Marketing in a blockchain world

You might be wondering how a decentralized company makes any money, as it isn’t charging transaction fees or serving advertisements. The answer is that many raise funds initially, as in a Kickstarter project, with a token crowd sale, also known as an initial coin offering (ICO).

You’re probably familiar with tokens. Even if you don’t buy Xbox or World of Warcraft digital credits, you’ll definitely be familiar with subway and laundry machine tokens. The concept in a decentralized company selling tokens is exactly the same. You trade your normal currency (like dollars or euros) for a chance to ride the merry go round twice, the subway fifteen stops, or to wash a load of clothing.

Only, instead of selling new tokens constantly, smart decentralized companies sell the tokens in advance, in order to raise the funds to build the project. After that, tokens can be exchanged between customers directly on an open market.

Therefore, much of the marketing for a decentralized company is done upfront, for the ICO.

How do you market an ICO?

That’s the million-dollar question … literally. As in the gold rush, where Levi Strauss made more gold than the average miner, it’s the ICO marketers, lawyers, and accountants who are really making bank. So marketing in this world means selling the product one time.

Much of the task of ICO marketing will seem familiar to marketers who have launched new technology projects, especially Kickstarter projects. There are two main factors: building hype, and most importantly, maintaining a community.

Toward that end, some companies have gone with flashy strategies like hiring celebrity endorsements from Paris Hilton, Floyd Mayweather, and Dennis Rodman. Ghostface Killah even stepped into the ring himself with CREAM (Crypto Rules Everything Around Me) Captial.

However, a much better goal in the long run is radical transparency.

Decentralized strategy: radical transparency

In Don and Alex Tapscott’s book Blockchain Revolution defines four principles of integrity: honesty, consideration, accountability, and transparency. They define transparency as:

Operating out in the open, in the light of day. “What are they hiding?” is a sign of poor transparency that leads to distrust. Of course, companies have legitimate rights to trade secrets and other kinds of proprietary information. But when it comes to pertinent information for customers, shareholders, employees, and other stakeholders, active openness is central to earning trust. Rather than dressing for success, corporations can undress for success.

“Undress for success” should be the marketing mantra of the decentralized era. Rather than presenting your product in the best light possible, focus on answering questions honestly. Rather than seeking press mentions, seek customer feedback. Instead of working on the site design, build your product well.

The customer and the shareholder are the same now, so everyone wants to be involved with the product. Provide many channels for them to reach out, including:

A Telegram channel
A Twitter account
A Facebook landing page
A website with a working contact form

Most purists would insist on a Slack channel, but I disagree during the ICO phase, because Slack’s outrageous social vulnerabilities are currently the target of choice for scammers. Instead, I would suggest hosting a chatbot on your official website. It can answer the frequently asked questions that come up over and over again in a more personal manner.

On any channel that you provide for communication you must be polite, informative, and above all, responsive. People will feel personally slighted if they are ignored.

The new way of marketing: customer success

What all this transparency and customer focus quickly adds up to is a culture of customer success. Lincoln Murphy defines customer success as, “the process of moving customers toward their ever-evolving Desired Outcome.”

How can you help your customers love using your product? How can you help them find success with your product? How can you make your customers want to shout your praises from the rooftops? These are the kinds of questions a decentralized company should be asking, instead of “on what platform should I focus my ad spend?”

Maybe marketing in a blockchain world will make us all better marketers and better makers.

Kiki Schirr is the founder of WeKiki distributed video platform, which is also planning to tokenize soon! Kiki can be reached easily through Twitter.