5 Innovative Ways To Boost Brand Loyalty On The Blockchain





Loyalty programs are a huge $360 billion-dollar industry. Over 16 trillion points are issued annually across 7.6 billion members. It’s a substantial industry that the majority of business worldwide use to drive customer spending and loyalty.

While substantial, its biggest problem is its fragmentation. Too many loyalty programs each with its own way of earning and redeeming. This can lead to frustration and a lot of unused points

Here are 5 ways blockchain technology benefits customer loyalty programs.

1.    A Streamlined Customer Loyalty Program

More often than not, customers are enrolled in too many customer loyalty programs. Sometimes, a single company or group can offer more than one loyalty program. As discussed above, this is due to each company having its own loyalty program with its own rules and quirks.

This can quickly get cumbersome and a nightmare to manage. This results in some loyalty points becoming neglected by the customer. This is clearly a missed opportunity.

A Forbes article has explored the possible application of this in a streamlined, universal loyalty program. This is a blockchain-powered system using a single digital coin across many brands or companies. Being decentralized makes it easier to manage and track. This can be a big time saver and gives tremendous value to the customer

Of course, this is something that no single company will do. After all, it won’t give away loyalty points just so another company can benefit from it. Maybe some bigger groups or conglomerates can implement this across all their brands to a bigger effect

So, this opportunity is more for a third party app or program that can offer this on behalf of the brands under its wing. Customers get a lot of choices and will be more encouraged to spend. Businesses, on the other hand, can outsource their loyalty programs, which can get expensive if managed on their own.

This can also work for brands that enter into a strategic partnership with other brands from a complementing industry. For example, an airline company, transportation company, and a hotel chain can all have a universal loyalty program.

This encourages customers to use services from all three, benefitting them. Plus, its easier for the customer rather than having three separate loyalty programs to deal with.

2.     A Value Multiplying Loyalty Economy




If brands are reluctant to make a universal digital loyalty coin with other brands, then they go for the next best thing – interchangeable coins.

According to a report done by Kaleido Insights, interchangeability of this digital reward coins is a business opportunity for brands to capitalize on.

Blockchain-powered digital coins are far more flexible and interchangeable than loyalty points. For all purposes, they can be treated more like a currency than anything else
This makes them pretty interchangeable. A customer joining these loyalty programs can exchange these loyalty points into another digital cryptocurrency. It might even be possible to exchange these for fiat money

This had tremendous value for the user. It gives people tremendous flexibility on how they would use their digital reward coins. This has the effect of multiplying the perceived value of these coins, encouraging people to buy more from the brand to earn more of these coins. This has the potential to drive sales through the roof.

It can even be exchanged for products or services from other brands. Because the digital coin itself has value beyond the company that issued it, other establishments would be more willing to accept it. The result is a loyalty coin economy that multiplies the value of all coins involved.

3.    A Safer Experience for Everyone

It’s no surprise that some people are reluctant to join loyalty programs. Close to 70% of consumers express such concerns, according to a PwC survey. Especially when it entails giving away their personal information. This is understandable, with the ever-growing incidents of identity theft online, one can never be too careful.

But with blockchain technology, it can become safer. Since anonymity is a key feature of cryptocurrencies, customers might not need to give their personal information. Or, if they need to, it can be assured that it is more secure and protected.

Companies, too, benefit from blockchain’s security features to reduce fraud. Because records are fully transparent and trackable, any unauthorized transactions can easily be spotted. This makes it harder for people to “cheat” the system.

A survey did revealed that close to 72% of loyalty programs have seen a fraudulent practice or two. With blockchains, these can be easily minimized or reduced.

4.    More Cost-Effective



Loyalty programs are expensive endeavors for any company. The cost of tracking points, monitoring redemption and seeing if it is all worth it financially really adds up. Not to mention marketing and promotion costs so people keep earning and redeeming

As with any new technology, implementing blockchain, of course, has costs upfront. But think of this as an investment, according to a report by Deloitte.

Blockchain systems can reduce costs associated with managing the transactions with smart contracts to track these. Costs due to fraud and errors are also eliminated, as well as time-consuming retrieval or reconciliation of transaction records.

With a cheaper system, you can give more value to customers and loyalty follows.

5.    Making It All Real-Time

Some loyalty programs are still in a darker age, with logging of points taking more than it is supposed to. This has the effect of frustrating people who want to use their points right away.

This is due to the majority of these loyalty programs still doing some aspects of it manually. Especially with older companies.

Blockchain systems can make it easier to store and record loyalty point transactions. This makes it possible to make these transactions almost real-time. Faster service means more loyal, happy customers.

CONCLUSION

With blockchain technology benefits disrupting every aspect of business and everyday life, loyalty programs are a prime candidate to follow suit. 

Having faster, safer and more flexible loyalty programs can make for increasingly loyal customers. That’s the best recipe for a very rewarding experience.

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