According to one report, the number of new DAO governance proposals codifying a company’s organisational and operational structure has increased eightfold in the last year. In May 2021, only 700 DAOs were operational. Today there are over 6,000.
Bringing DAOs into the mainstream is difficult, especially in a nascent crypto ecosystem where people are typically more concerned with making a buck than developing long-term businesses. As a result, many brands and companies aren’t in a position to fully decentralise their corporate structure, eliminate titles, and delegate all decisions to a decentralised community of pseudonymous users.
Every company, however, may deploy a hybrid DAO model that provides customers with a stronger voice, increases engagement, and puts brands in a position to thrive in a decentralised future.
Hybrid DAO models
DAOs offer a unique learning experience for brands preparing for the inevitable rise of the metaverse and other blockchain-based business elements. The main goal, as always, is to find realistic and long-term approaches to promote consumer engagement.
For starters, customer engagement is critical to bottom-line outcomes. A study on customer engagement found that companies investing in and elevating customer engagement saw revenue rise by 70%, an astounding figure emphasising the importance of establishing communities and relationships.
Meanwhile, clients with positive brand experiences are 50% more likely to try new products or pay premium prices. That’s why customer engagement is critical to operational sustainability and revenue growth for successful companies.
A hybrid DAO model, in which projects deploy a community-owned token, can improve customer engagement by giving all stakeholders a say in various decisions that enhance buy-in, inform better products and cultivate community.
This is all feasible for brands without requiring a major overhaul of their current infrastructure.
How brands can adapt
A hybrid DAO can take many forms. The ultimate goal is to allowcustomers to propose and vote on various product or service features.
Brands, for example, can distribute a product road map poll to stakeholders, allowing them to vote on the most important feature enhancements and new capabilities. This delivers the voice of the customer directly to product development teams, which can improve both customer sentiment and brand maturation.
Similarly, brands can embrace a DAO ethos by engaging stakeholders on:
- Design updates: Product design is more than just a list of technical specifications. It cultivates an emotional and practical connection with customers, so that customer insights can have a meaningful impact on future versions.
- Product look and feel updates: A product or platform’s look and feel affects affect user engagement. Allowing people to give input adds significant audience input to these aesthetic choices.
- Branding and logo changes: A company’s brand and logo strongly resonate with the most loyal customers. In addition to allowing people to vote on revisions, consider soliciting special event or temporary logo submissions from the community and letting people vote on their favourite designs.
- Event or festival programming: To make sure that a company’s event or sponsored activity truly resonates with its audience,, companies can gather feedback on the artists, speakers, schedule and other program specifics.
Communities’ competitive advantage
When brands give customers more of a voice, they build an avid following of devoted customers who are deeply invested in the future of the brand/product because they are involved in the decision-making process.
Simply put, insights into customer demands and desires help brands to be more successful in delivering what people actually want. Crowdsourcing ideas can lead to even stronger end results when it comes to changes to products, branding, design and more.
In other words, brands can benefit from the wisdom of the crowd.
Brands and companies that use a hybrid DAO model will begin to view their customers less as “customers” and more as members of their team and contributors to their community.
This shift in brand mindset could have far-reaching effects on the culture and structure of businesses.The rise of the metaverse and Web3 will favour brands that adopt a hybrid DAO model over those that don’t, making a hybrid DAO model a multifaceted competitive differentiator that can set brands apart from the competition both now and in the years ahead.
