Case Study: How FIAT Aims to Reinvent Loyalty with Web3
Last month, FIAT kicked-off its Web3 campaign with "FIAT Pass". Here's how one of the biggest car makers in the world is trying to reinvent loyalty and ownership for car brands.
After Porsche, Honda, and Mercedes-Benz, FIAT has become the latest global car brand to enter the Web3 space.
Unlike its peers, FIAT has taken a new approach in how it uses Web3 to redefine customer engagement and brand loyalty.
Today, we’ll explore how FIAT's recently launched Web3 program could flip the script on customer engagement in the automotive sector. We’ll look at:
Challenges for modern car brands
The FIAT brand
FIAT’s Web3 activation
Why Web3
Learnings & what’s next
Ready? Let’s jump in.
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This article is published in a partnership with Web3Audience, FIAT’s Web3 digital & marketing agency, which provided me with exclusive insights.1
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Car Brands: Building Digital Relationships
In the past, car manufacturers primarily competed through superior driving performance, car reliability and car-centric marketing strategies.
Now, the landscape is changing. Performance remains important but is now considered basic expectations by consumers.
Many consumers, especially those under 45, prefer digital interactions over visiting car showrooms. And around 60% of car buyers under 45 are likely to purchase their next car online.
This changes how car brands interact, engage and build relationships with their customers.
Let’s unpack this.
Before the Showroom: Customer Lifecycle Management
Customer lifecycle management is a fancy term that describes how a brand connects with its customers across the lifecycle of a product.
For car brands, it starts when a customer first notices the brand and goes on through the buying process until the car is no longer used.
Cars last for years, so the time a brand has to keep a customer interested is also long.
This leaves car brands struggling in keeping engaging customer relationships over several years, in the hope of being top-of-mind when the purchase decision eventually happens.
For example, when car buyers first begin to shop, 6 out of 10 them are open to considering multiple vehicle options. On average, car brands have a loyalty rate of around 50%.
Let’s look at some obvious reasons for this:
Long and spread-out customer journeys
Few direct ways to connect with customers
Not enough data for personal, relevant customer experiences
Traditionally, car brands have sold their cars through dealerships. This limits their chance to build direct relationships with customers. Plus, these relationships often start only at the point of sale. This approach misses out on the years leading up to the purchase.
This is why, in recent years, car brands have shifted to digital acquisition channels like social media, although even this approach is becoming less effective.
Crowded Web2 Acquisition Channels
Organic social reach on Facebook has been dropping for years. Research shows that only about 0.07% of a page's fans engage with an average post. Facebook is still the top social media site, but Twitter and Instagram face the same issue.
This means a brand's posts reach only a small part of its audience.
Let's sum up the current challenges for car brands:
Adapting to digital-first customer journeys, where most research and decision-making happen online.
Increasing brand strength throughout the customer lifecycle.
Personalizing marketing to different customer groups with varied needs and preferences, for deeper connections.
Moving past simple "likes" on busy Web2 platforms to create new, relevant ways to engage.
Avoiding transactional relationships and unvalued rewards, which lead to high brand-switching rates. In fact, 61% of consumers switched from one brand to another in the last year.
Now, let's look at how FIAT is addressing these issues with its Web3 initiative. But first, a bit about the brand itself.
The FIAT Brand: 100 Years of History
FIAT, an iconic automobile brand, stands for affordable luxury by blending practicality with elegance.
Founded in 1899 in Turin, Italy, by a group of investors including Giovanni Agnelli, FIAT (Fabbrica Italiana Automobili Torino) quickly became known for its innovative engineering and design, symbolizing accessible automotive innovation.
FIAT believes in making high-quality, stylish vehicles that are affordable, showing that luxury and affordability can go together.
The brand played a big role in Italy's motorization and became a symbol of Italian design and engineering.
FIAT’s cars, known for their compact design, are ideal for cities. The FIAT 500, its most popular model, launched in the late 1950s, turned into an icon of Italian culture and style. It’s a perfect example of FIAT’s ability to create vehicles that are both functional and aesthetically appealing.
Today, the FIAT 500 is at the forefront of the brand's Web3 initiative. Here's how.
FIAT enters Web3
Recognizing these challenges, FIAT USA has entered Web3 with a customer engagement initiative, with a vision to expand into an augmented loyalty program. Loyalty programs have become a key use case for Web3 among brands.
Strategic Context
Let's understand why FIAT USA launched this:
Entering the US market: With its electrification strategy, FIAT plans to enter the US market in early 2024 with the new FIAT 500e. Its Web3 activation should support that. In 2022, the FIAT New 500 led EV sales in Italy, ranked third in the top 10 European markets, and was Stellantis’s (FIAT’s parent company) best-selling battery electric vehicle in Europe.
Rewarding loyal fans: Like Starbucks’ “Odyssey” program, which strengthened ties with its loyal customers, FIAT aims to deepen connections with its most loyal fans.
Attracting new audiences: FIAT seeks new ways to draw in a growing, tech-savvy audience. These younger consumers use multiple channels and spend a lot of time online. They expect virtual products and experiences, including digital collectibles.
Community-led branding: FIAT is keen on building a community-led brand, allowing it to shape the company's future.
“Breaking the code”: FIAT's launch aims to elevate the Web3-enabled loyalty experience for car brands. This aligns with their spirit of innovation and offers a chance to explore blockchain technology.
The FIAT Pass
At the heart of the program is the "FIAT Pass".
It serves as an entrance ticket to FIAT’s future Web3 loyalty experiences. FIAT USA launched it in mid-November as a free, "open edition," mint, allowing unlimited minting by users, attracting over 55,000 new and existing FIAT customers.
FIAT aimed for accessibility and inclusivity, aligning with its values. This contrasts sharply with Porsche’s exclusive NFT drop earlier this year, which cost over $1,500 per NFT and was highly exclusive.
What makes the FIAT Pass unique? It's soulbound and dynamic.
Let’s unpack this.
Evolving Loyalty
FIAT is the first car brand to launch a dynamic, soulbound NFT.
Soulbound: This means the NFT can't be transferred or sold. It's a unique membership ID, similar to Nike's ".SWOOSH ID" for its Web3 platform.2
Dynamic: Unlike most static NFTs, dynamic NFTs can evolve. User activity changes the NFT's state, allowing it to grow over time with user input. This opens up many use cases, like evolving loyalty programs.
As FIAT Pass holders engage in the FIAT ecosystem, their Pass updates, unlocking new experiences and real-world benefits like:
Free rides, mobility subscription discounts, and priority car reservations on Free2move, a global car sharing and rental platform (170 countries, 450k rental cars)
Access to special branded collectibles, such as CINQUECENTO released today
Early access to upcoming cars
New roles within the FIAT community
and other rewards.
Essentially, FIAT Pass serves three main functions:
A foundation and entry ticket to the FIAT community (FIAT's Discord has 37k members)
A gateway to future loyalty and co-creation experiences
And in the future, could be a link to FIAT cars. Wait, what?
This last point is transformative, creating a new connection between car owners, their cars, and the brand.
Connecting Cars to NFTs
Connecting NFTs to cars is a novel idea. Mercedes-Benz explored it in a patent for using NFTs as proof of ownership and vehicle data storage.3
The FIAT Pass could play this role in the future. It will enable car-NFT connections, offering benefits based on car usage, like:
Rewards for sustainable driving
On-chain vehicle data storage
Proof of car ownership
and more.
Dynamic NFTs will update automatically with vehicle data.
Why is this significant?
Post-Purchase Marketing: Car ownership proof in virtual environments could lead to NFT-based loyalty activations and token-gated experiences.
Personalized User Experiences: FIAT can offer rewards tied to specific cars, customers, and driving behaviors. Vehicle settings and preferences could be linked to an individual's NFT, applying seamlessly in any compatible vehicle.
Secondary Sales: Digital records of physical products can enhance transparency in car trading, potentially boosting resale value.
For now, this could be the vision for FIAT Pass's long-term goal. With their current announcements, the foundation for such experiences is already set.
Direct Customer Relationships & First-Party Data
FIAT USA's recent NFT drop, attracting 55,000, isn't just a big campaign for lead generation and engagement. It's also a tool for:
Engaging directly throughout the entire customer lifecycle
Building direct relationships with people who may not even own a FIAT car yet (!).
These 55,000 users include FIAT fans, customers, and Web3 enthusiasts – the campaign reaches both ways.
And here’s where it gets interesting:
FIAT Pass NFTs augments FIAT's CRM. Users provided their wallet and email addresses, and ZIP codes for US residents, to mint.
This is significant. It enables FIAT to:
Merge traditional data with digital assets in wallets (and possibly car data) for unique offers.
Meaningfully engage with its audience, years before a purchase.
This could be the marketing tool the car industry needs for deeper customer connections. Again, a purchasing journey that takes years is very hard to keep track of.
More first-party data means more personalized experiences, a key opportunity of Web3 for brands, especially with cookies fading away.
A big question remains: privacy. Are users aware of how much data Web3 wallets share? Brands might need to be transparent about data use without Web3 data protection mechanisms.
Building on Arbitrum
FIAT launched its program on Arbitrum, an Ethereum layer 2 blockchain, chosen for its reliability and capacity for high-volume, low-cost transactions. It's the first major brand to use Arbitrum, with others opting for Polygon, Flow, or Ethereum.
Cinquecento: The First Drop
Today’s Cinquecento NFT drop kickstarts the FIAT Pass loyalty experience, offering the first tangible benefits for holders:
Priority access to order the FIAT 500e’s in North America.
Digital art for a FIAT 500e car from Italian digital artist Stefano Contiero.
Privileged access to future vehicle releases, digital and physical experiences, and more.
Mobility credit for the FIAT® 500e.
Planting a Longleaf pine in a restoration project.
These benefits clearly outweigh the initial cost of the NFT, while focusing on FIAT's core product: the car. This is similar to Starbucks that designed its whole Web3 loyalty program around the coffee drinking experience.
What’s more, the NFT not only provide physical benefits linked to the car but also allow buyers to own a piece of the brand through a digital experience, making it one of the richest Web3 experiences among car brands.
It’s easy to see how this allows FIAT to build up a loyal, global community with tens of thousands of members and run targeted activation (and even co-creation) campaigns for new car models they release.
Could this be the next-gen loyalty model for car manufacturers?
Why Web3?
Why choose Web3 for all this? It remains the most important question for all Web3 activations. Here are some reasons:
Next-gen loyalty: Web3 enabled loyalty – once deployed at scale across brands – could unlock tremendous value for customers with loyalty ecosystems and transferable, dynamically upgradable loyalty assets4. Those assets (or NFTs) are powerful, as they can be issued on a brand’s platform and exchanged off the platform without a brand having to build all the infrastructure for it.
More data: Web3 offers an additional data source for brands.
Blockchain for car interaction: An untested but promising use case for customer data.
Future proofing: We’re early. It’s very likely that we’ll see tremendous innovation happening in the Web3 consumer space, particularly around loyalty. Stellantis group, FIAT’s mother company, owns many of the leading car brands such as Alfa Romeo, Maserati, FIAT, Jeep, Chrysler, Opel and Peugeot. Such a program could be rolled out to other portfolio brands, unlocking interoperable loyalty benefits.
Take-Aways & What’s Next
FIAT's Web3 journey is just starting, offering insights into what’s yet to come.
Key takeaways for brand leaders are:
Focus on real-world utility within a brand ecosystems: End of 2022, I predicted that brands will move beyond NFT collection towards real world benefits within their brand ecosystem – and ecosystem of brands. That’s exactly what FIAT is doing now. Its partnership with Free2move (also part of the Stellantis Group) and the direct benefits connected to vehicles is a first step towards that vision.
Focus on new and existing audiences: FIAT Pass appeals to both fans and new Web3 users who haven’t had an existing relationship with the brand. The FIAT Pass experience still feels more like a Web3 than a Web2 experience – the team might tweak that in the future.
Focus on community: Successful Web3 activations start with community. FIAT's engaged 37,000-sized Discord community is central to its strategy. FIAT Pass is no exception.
Long-term engagement: Mix immediate (e.g. priority access to order the FIAT 500e) and lasting benefits to maintain engagement.
Could this be a blueprint for other car manufacturers? Possibly.
For now, it's an experiment, but a promising one.
That's it!
Talk soon,
Marc
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It also helps to avoid regulatory complexity as it’s not tradable.
"Method for minting and using vehicle-related non-fungible tokens, and information technology system" – 31.08.2023. Link
While FIAT Pass is non-transferable, Cinquecento NFT is tradable.
Excellent summary of how Fiat is on the track (pun!) to becoming a Web3 leader. Thanks for your time putting this together Marc!