The experience of 2017 is often referenced in the blockchain industry. It was the year that Bitcoin achieved the lofty heights of 5-digit dollar valuations, dragging the entire cryptocurrency market along on a wild ride of financial gains traditional markets had never experienced before.
Yet this watershed moment for crypto often ends up as a stumbling block for blockchain projects, especially when it comes to their marketing strategy. This is because the incredible market successes of that year are mistakenly attributed to the marketing efforts that accompanied those huge rallies for hundreds of blockchain projects seeing their token values go up 10, 100 or even 1,000 times in the space of weeks and months.
As it turned out, the unprecedented successes of 2017 could not be replicated in the following years. Perhaps then, massive airdrops, giving away free tokens to thousands of early adopters, resulted in waves of new users and speculators thanks to a network effect. Perhaps then, a project would be able to pay a few exchanges to list their token after an ICO, alongside focused promotional activities from a cohort of crypto influencers, pumped by thousands of bounty hunters spewing out Tweets, and see their tokens rise in price and volume.
But the two years that followed saw less and less meaningful results from these activities. Airdropped tokens were immediately dumped, hurting their prices from day 1. ICO investors turned out to be scalpers, liquidating their positions as soon as prices were even slightly higher than what they bought tokens for. Influencers and bounty hunters promoted everything that came their way, with no regards for actual quality of projects or token viability.
And so, as blockchain projects spent huge amounts of money, hoping to repeat the “successes” of 2017, the majority of them ended up wasting budgets and time pumping hot air into a punctured model.
Markets are emotional. So are crypto buyers.
What they failed to realize wasn’t that there was no correlation for this success of 2017. It’s that the market success of this period was closely tied to the sentiment of crypto buyers -- the fact is, both retail and institutional money were pouring into crypto because they were riding on waves of optimism. Conversely, the bear market that followed was a direct result of investors shifting their sentiment towards pessimism.
In other words, crypto buyers weren’t really that much different from traditional buyers -- they acted on emotion more than anything else. Their decisions for buying up crypto or participating in blockchain projects had everything to do with how they felt about the project or crypto, regardless of the actual fundamentals (business, technical or otherwise) behind it.
Surprise, surprise, right? Well, we already know that consumers buy on emotion. A Harvard professor claims that purchasing behaviors are hard-wired into our emotions, with neuroscience suggesting that up to 95% of buying divisions are actually made subconsciously.
When it comes to crypto, it appears that science is even more certain on this theory of emotional buying. According to Warwick Business School, it is investor mood, rather than any other economic indicator, that most determines the price of crypto assets.
Want more evidence? Much more than other markets, crypto’s Fear and Greed Index is often used to help speculators determine whether to buy or not!
So how do we leverage that in blockchain marketing?
When looking at a range of blockchain projects, we can also see that market value correlates very well, not with technological superiority but with the strength of the community -- in particular, of users.
It’s not coincidence that the top cryptocurrencies by market capitalization are probably also the ones with the strongest community and with the most participants.
A perfect case study is the OneCoin and Bitconnect scams. At one point, each of these coins were second only to Bitcoin in terms of market capitalization and volume of trading. Fascinatingly, none of them had any blockchain to begin with, nor did they use any blockchain technology. Each relied on massive marketing efforts with extravagant conferences and gala events hyping up millions of people to make them feel good about the project.
It’s no exaggeration to say that these projects managed to whip up such fervor in their followers that even to this day, with both already exposed as scams, there are thousands of “ambassadors” and investors still rabidly defending the projects and investing money into it.
Now, we’re not suggesting that blockchain marketing needs to be about subliminal messaging or that they should focus on building a cult following. But the fact is, crypto buyers are probably on the extreme side of consumer types in that they rush in when they are positive, and rush back out when they aren’t.
The lessons to be learned here is:
Market to your buyers and understand what motivates them to buy your product or service. Convince them that they need it, and they will buy it.
People are less interested in your technology. How sophisticated your blockchain or token is, isn’t useful to them. Make them feel happy, and they will buy.
Stories fascinate people, especially if it’s about them and making them the center of focus. Talk about your company and product less, talk about your users more.
To sum it up, blockchain marketing needs to focus on your community of supporters and future users. Your tech is important, of course, and achievements in this aspect should be celebrated and communicated. But take care of your community’s emotions, and you ensure that your ecosystem of participants is healthy and vibrant, so you can focus on the business side of things without worry.