Tim Mangnall | Why Liverpool’s NFT drop has failed to live up to expectations

Tim Mangnall, chief executive of NFT advisory firm Capital Block, explains why, in his view, Liverpool FC's launch of a new NFT collection has not been a success, with only 5 per cent of the collection having sold at the time of writing.

Capital Sport Media chief executive Tim Mangnall.

Liverpool FC’s NFT drop has certainly caused a stir. Last week the club launched its first NFT collection, the LFC Heroes Club in partnership with auction house Sotheby’s.

There is a lot to unpack with the club’s first foray into the NFT space. It’s easy for people to criticise the execution, but it is the first Premier League club to officially launch a collection of NFTs, and for that alone it should be lauded. It’s a bold step that at the very least it shows an acknowledgement of the potential of NFTs for fan engagement.

However, when you look at the numbers, they don’t make for great reading. At the time of writing, of the 178,000 NFTs available, just 5 per-cent have been sold. On the face of it that’s damning, with the club generating little more than £1m ($1.31m) from the activity.

But NFT launches are not just about revenue, and it’s worth looking at whether the initiative has been successful in connecting with, or engaging the club’s fans. That’s where this has really fallen down, because the project – while ambitious – did not take fan engagement into account enough.

Lack of education

One of the missing pieces to this was an effort to really help fans understand the offer. Yes there was a big media announcement with plenty of fanfare, but the club did a poor job of explaining themselves to fans, and that’s why they didn’t connect.

NFTs are still a new technology, so the education piece is critical to success. If the fans don’t understand what the club is trying to do, and why it should matter to them, they will not engage. The club needed to do a better job of communicating their plans to the fans, and explaining the intricacies of NFTs to get their buy-in. That means providing resources and explainers that are easy to understand for their fan-base.

Confusing consumer journey

Another issue was the consumer journey when a fan went to buy the NFTs. It was far too complicated. To the point above about educating fans, and using clear and simple language – the customer journey was anything but.

We tried it out. Not only was the language muddy and misaligned with your average football fan, but the journey was confusing. You were sent from the LFC website to Sotheby’s website, and then taken straight into purchasing an NFT, where you were hit with all sorts of jargon about creating wallets, without any real explanation of any of it.

Such a convoluted journey provided too many opportunities for potential customers to be lost along the way, particularly if they felt they didn’t understand what they were buying. A better approach would have been to have more information on a single website, and keep the entire journey in one place. Nobody likes being bounced about when they are trying to buy something.

The product itself

Another issue was with the artwork for the product itself. While it certainly matched the ‘LFC superheroes’ concept, we wonder if the style was too cartoonish for widespread success. Did the club consult fans about what they’d actually like to see, or what they would consider buying themselves? It feels like the whole thing was thought up and designed in silo, without any real thought as to what might resonate with the fans.

Then there’s the question of volume. What was the club thinking in trying to sell over 170,000? This was their biggest downfall, and whoever advised them on this made an extremely poor decision. It set the whole project up to fail. Given knowledge about NFTs is still extremely small across the footballing demographic to think they would sell anything close to this was ridiculous.

Look at it this way – Liverpool have 36 million fans on Instagram, meaning they would have had to sell an NFT to 1 in every 210 Instagram followers to sell out the collection. We know how difficult it is to convert social media followers into purchasers at the best of times, but add to that the lack of knowledge about NFTs by football fans, poor education from the club and a difficult customer journey, the fact is that they have done well in selling nearly 10,000. The recipe for success simply was not there.

There is lots to learn from this episode. As we said at the top, while Liverpool clearly haven’t got this exactly right, and there are a lot of things we would have advised them to do differently, the fact is they have taken the leap and they will learn from it. Hopefully other clubs do too.