NFT Memberships for Wellness Clubs: What are They?
Let’s find out what NFT memberships are and how they can solve many challenges currently faced by the billion-dollar fitness industry.
As we know, membership programs have always served as a way for companies to form deeper relationships with their most active customers. The two basic models of membership programs are:
- Paid memberships: This is the most popular membership model when users pay a set amount of money either monthly or annually to receive a predetermined package of members-only benefits. These perks may include tickets to events, access to premium content, discounts on products, and so on.
- Free to join: Users get their free memberships after signing up. They are offered different tiers of perks, which are unlocked based on purchasing activity or related metrics.
With the introduction of non-fungible tokens (NFTs), traditional membership programs are getting a much-needed upgrade unlocking new growth opportunities and financial incentives for both businesses and NFT holders alike. Even though many nonfungible token (NFT) projects continue to suffer losses due to the bear market, some organizations started using NFTs to solve real-world problems.
NFTs for subscription/membership-based models, or loyalty programs, are becoming more and more popular. This point was brought up in Forrester’s report, 2023 NFT and metaverse predictions, which says: “Brands will pivot from ‘cool’ non-fungible tokens (NFTs) towards loyalty. In 2023, brands will shift their focus to NFTs linked to loyalty, brand experience, and deepening customer relationships.”
Actually, there are companies that currently implement these use cases for NFT. For example, Starbucks recently announced an NFT-based loyalty program.
NFT Memberships for Wellness Clubs
Yes, the idea of applying NFTs for loyalty programs or membership models is new, but many big businesses are beginning to understand their potential. Fitness industry may be the next to use NFT-based memberships, since a few innovative gym owners have already started exploring this model.
Global Fit Club is a blockchain-based fitness platform. Its CEO and founder Deni Zulic told Cointelegraph that Global Fit Club will soon offer NFT memberships to allow users access to a full range of fitness services. Zulic added that Global Fit Club is working with well-known fitness centers like Anytime Fitness and F45 Training, to ensure that members gain access to to give NFT members more benefits.
“This isn’t just a gym membership. NFT holders will get discounts on fitness related services such as supplements, personal training and equipment, as Global Fit Club has a number of partners lined up to provide this,” he said. Zulic also noted that Global Fit Club will incentivize users to workout through its move-earn-platform which pays NFT holders cryptocurrency when movement is tracked.
Zulic also said that an NFT-membership model can solve the problem of gym membership price fluctuation:
“Some gyms have been around for years, once offering memberships for $6 a month. These same gyms are now offering memberships for $50 a month. Users that have $6 membership rates may not use their membership, but continue to keep it so they don’t have to pay more if they decide to go to the gym again. Or, some members may be forced to pay higher fees due to things like increasing inflation.”
In the case of NFT-based gym membership, members can purchase the nonfungible token at its floor price and then continue to get the benefits for life. Zulic also said that if a member wants to cancel their membership, they could sell their NFT and even make money depending on the asset’s value over time. “With NFTs, gym members can have full ownership of their memberships. They can lock in a certain rate and then sell their membership if they choose,” Zulic said.
A study has found that 67% of gym members never actually use their membership. Recent research also shows that Americans spend $397 million a year on unused gym memberships. This problem might be solved by a program that gives rewards in the form of crypto payments. Zulic noted that Global Fit Club plans to launch in Quarter 1 of 2023.
Lavinia Errico, co-founder of Equinox Fitness Clubs, told Cointelegraph that she believes NFTs will be very valuable for membership-based businesses:
“Fitness, wellness, social, private clubs, etc., all of these businesses are ripe for this huge disruption. Any companies who do not embrace this will be left behind. It’s best to get on board now.”
Rafi Anteby, founder of Rafi Lounge, told Cointelegraph that while the firm has been open for over two years, he recently became aware of the need for a more efficient membership model.
“There are many wellness clubs around the world that over-promise and underdeliver benefits for their members. Members also typically get locked in to high rates even if they don’t leverage their membership. There are also security issues associated with traditional gym memberships,” he said.
Anteby has started pre-selling a few NFT memberships to current members to solve these problems. According to Anteby, the official Rafi Lounge NFT mint will take place on Nov. 11.
Anteby pointed out that NFT-based memberships can provide greater security, as verification is based entirely on the nonfungible token. “We have an app that creates a unique QR-code for each member holding an NFT. It also uses facial recognition. This ensures that members are the only ones able to come in and take a class.”
Why NFT-Based Memberships?
NFT-based memberships utilize blockchain technologies, so it’s impossible to counterfeit membership NFTs or create duplicates. Users don’t need to worry about losing their physical cards or forgetting their sign-on information.
NFT-based membership programs facilitate a two-way partnership between brands and holders. Through scarcity, incentivization, and liquidity, membership NFTs ensure that both brands and holders are aligned with the future success of the program.
Let’s discuss how scarcity, incentivization, and liquidity function in NFT membership programs to better serve both brands and holders.
1. Scarcity and Membership NFTs
Brands can better plan and focus on delivering exceptional experiences to their core holders by limiting the supply of memberships and creating scarcity through NFTs. Notably, holders aren’t the only ones who benefit from this. By offering perks brands are “building a community of ultra-active purchasers” who are “champions and advocates of the brand.”
This differs from traditional membership programs that fail to limit how many members are able to achieve a certain status. For example, in the case of airline rewards programs, unlimited memberships leads to too many members fighting for a limited number of perks or trying to take advantage of their rewards at the same time, such as seeking seats on a popular flight path.
2. Incentivization for Holders and Brands
When it comes to NFTs, the value of a membership program isn’t solely determined by the brand offering it. Since membership NFTs hold monetary value in their own right, there is an equal incentive for holders and the brand to increase the price of the membership over time.
The value of the membership NFTs equally depends on the brand’s commitment to deliver utility and benefits, as well as the members’ collective efforts in advocating for the brand, creating a true partnership.
With NFT memberships, both sides are incentivized to actively look for new ways to increase the quality of the brand and, in so doing, increase the value of the membership NFTs.
3. Liquidity: Selling NFT Membership Tokens
One of the most important differentiator between traditional and NFT-based memberships is the ability for membership NFTs to be traded on the open marketplace. Whenever you decide to cancel your membership you can easily resell your membership NFT and make money doing so. Moreover, brands can receive a predetermined royalty percentage every time membership is resold.
To summarize, NFT memberships represent an opportunity to create a deeper sense of community, boost brand loyalty, and reward your most engaged customers with exclusive access and privileges.
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