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Regardless of how you personally feel about the prospect of using digital currencies, it’s hard to deny that cryptocurrencies have generated a ton of momentum, both good and bad. But, from each experience, domestically and abroad, there are lessons to be taken away.
Abroad, we have countries like Malta (“Blockchain Island”), that are at the forefront of adopting and welcoming both blockchain technology and cryptocurrency startups to its tropical abode, and the Marshall Islands, which has issued its own cryptocurrency (crypto) as an official national currency. Yet, domestically, the U.S. dollar (USD) is still accepted. The Marshall Islands is a United Nations member and sovereign state, which creates a larger impact for banks globally because they will be forced to accept crypto.
In February of this year, Venezuela launched its own oil-backed crypto called the “petro”, but it hasn’t completely removed the fiat bolivar from circulation. Despite Venezuelan excitement, it wasn’t well-received abroad. Currently, Venezuela is under U.S. sanctions, with U.S. President, Donald Trump’s recently issued executive order, barring anyone in the U.S. or a U.S. territory from investing in its currency.
But, as we know, the emergence and utilization of digital currency has become ideal for the purpose of decentralizing our financial transactions. Still, the adoption and conversion rate are still low from a general consensus, as not everyone is convinced or fully educated on how the technology behind it works.
Early Birds, Get the Worm
While still in its initial stages of development, there are still benefits for early adoption. Understanding what a digital asset is and what crypto can do for a consumer and businesses is the first step.
For a B2B or B2C model, accepting crypto as a form of payment could provide a huge advantage as compared to other competitors within a given industry.
I spoke with Ripple’s Senior Vice-President of Marketing and Communications, Monica Long, about the benefits they have seen businesses reap from this technology.
#1 –Improving the Speed of Financial Transactions, One Country at a Time
According to Long, the waiting period associated with moving funds from one country to another can take an extremely long time to process. “Moving money from one country to another can be extremely costly and time-consuming; your money can be in limbo for up to five days, which is absurd when a business could be putting that capital to work,” she explained.
“This friction in cross-border payments has driven enterprises to be some of the biggest champions of blockchain technology and digital assets. For example, these individuals are asking their banks to look into this realm as a solution to their problems. This is beneficial for smaller businesses who pay suppliers in other countries and have tight margins. By utilizing this technology, these mom and pop stores can help to reduce their costs and speed up the time it takes to move money.”
#2 –Reducing Expenses
By now, we all know that this technology can help reduce expenses, but what does this mean specifically for businesses?
- Growing the business by attracting new customers;
- Reducing overhead costs associated with accepting customer payments;
- No intermediaries and third-parties managing and processing transactions; and
- Extremely low processing fees for transactions
Tailoring technology to the business structure itself, regardless of its size, can help retain customers, or drive them away.
On-boarded or not, businesses would do well to absorb stronger business analytics reflecting what competitors are/are not doing with their businesses.
While there are many examples of major companies accepting crypto, such as Bitcoin, it’s still not a universally accepted behavior. Capitalizing off this, becoming a thought leader in this space is extremely profitable. By educating consumers and the general public on the power of this technology, could make the difference in engaging a new market.
At one point, there will be a customer coming to a business’ door, asking whether or not they accept crypto or not; and it needs to be ready to respond. Education, regardless of its form, is vital for a business to continue thriving in our digital age.
One of the biggest marketing benefits is appealing to the dedicated fan bases of cryptocurrency.
There are business communities that support economic empowerment through digital currencies and community building. For example, Bitcoin rewards only the miners and not the other actors that play an active role in maintaining, developing and promoting the project. SmartCash, on the other hand, is a community-centric cryptocurrency where community and development comes first, with the platform allocating 70% of a block reward to fund community proposals.
“While only 8% of Americans are currently invested in cryptocurrencies, that percentage cares deeply about the cause. Accepting crypto at the expense of another competitor, drives the consumer market, inspiring returning customers. Not just because crypto-enthusiasts want the more convenient option, but because they’ll go out of their way to support businesses advancing the cause.”
This is a very powerful community and there is a powerful message to share to the world—consumers want a change when it comes to transacting, whether it’s for personal reasons or business.
#4 –What Should CMO’s Do Right Now?
While there is a lot of promise with blockchain technology, there is, unfortunately, according to Long, a lot of “hype.”
We are also seeing observing many companies attempt to force these new technologies, specifically the Blockchain, into their business model. The problem? It doesn’t always fit or make sense.
However, understanding why a business may not necessarily require the technology, is vital to surviving in an “eat or be eaten” world.
“It’s important to remember, that you don’t need the Blockchain for everything,” Long emphasized. “While some may be tempted to jump in for the buzz, building a long-term and trusted brand, means focusing on solving real world problems for customers; not jumping on the latest bandwagon.”
So, what should CMO’s be looking at in determining whether or not this technology could prove useful to their consumer base?
#1 – Know Your Target Demographic
First, recognize that not all businesses will see the same benefits in adopting crypto. If your target market struggles with new technology and/or prefers traditional methods of doing things, adding crypto as an accepted method of payment may only serve to confuse them. Identify whether it’s a better business decision to leave it out of the core model, or simply educate customers.
Second, creating subscriber lists for your crypto users is a good way to monitor those customers who utilize crypto as a payment method. Take note of those customers who would appreciate such an option, and those who wouldn’t. If possible, add those interested to a subscriber’s list, separate from the rest of your customer base. This could serve as a source of announcing crypto-specific promotions and/or new developments by the company in this realm, without flooding other customers.
#2 – Scour the Crypto Community
Payments are a clear and proven use case for blockchain technology, so today, CMO’s should identify the source of their biggest “pain point” for payments. For example, is it supplier payments? Or, is it paying employees in remote locations?
Once that pain point is identified, business owners can begin exploring how to utilize the Blockchain or digital assets to then remedy it.
#3 – Execution
If you’re inclined to agree that crypto is the future, start accepting the currency. Depending on which form of crypto you plan to accept, there are various ways to dive in. Choosing an appropriate cryptocurrency exchange is vital. More importantly, run a few test transactions before making it publicly available to your market.
Once you have chosen an appropriate exchange and run tests, it’s time to announce it to your market. But, when announcing it, make sure it’s more than simply placing a small icon or thumbnail on your site. In becoming a thought leader for the space, educating (accurately) the community in how the company plans to enter the space, and utilize crypto as a form of payment, will help establish trust between the thought leader and the community. If it’s anything the community enjoys, it’s understanding why people are getting involved to begin with, more than just the hype. In other words, transparency.
But, it’s important to remember that not all businesses can or will benefit equally by accepting crypto as a form of payment, but it does allow for a head start over the competition by accepting it early. Crypto still has many years of growth ahead of it before it becomes a national standard, but the eagerness of the crypto-community has the power to give businesses a substantial boost in the meantime.