Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 5)

Blockchain and Loyalty – 2

Forbes: “Traditional loyalty programs present challenges for both companies and customers. Organizations are concerned with estimating liability, personalization, improving conversion rates and uniformity among channels. From the customer side, there are challenges with restrictions and rules, reward options and the most common problem: losing track of accumulated rewards points. This isn’t surprising given that the average U.S. household participates in up to 29 different loyalty programs. Armed with this information, companies that want to stay top of mind are looking to develop easy-to-use, secure and flexible programs that engage their customers. Blockchain has the potential to improve loyalty programs for both companies and consumers.”

Abderahman Rejeb, John G. Keogh and Horst Treiblmaier: “Blockchain technology is based on peer-to-peer communication which alters market structures by fostering disintermediation, namely the removal of intermediaries who process and filter data streams and add cost. By creating immutable and shared data records, blockchain technology can also help to improve data quality and facilitate data access. From a consumer-centric perspective, blockchain technology has the potential to substantially transform consumer relationships by enhancing data and information transparency and improving privacy and security. It also allows for innovative forms of consumer loyalty programs which might help to create additional value.”

CNBC: “One of the biggest upsides of crypto-based loyalty points is that they can be exchanged for fiat currency or other cryptocurrencies. Normal loyalty points, on the other hand, can only be redeemed for certain products and services. If you are not in need of these products and services, then your loyalty points hold no value. Also, with a normal loyalty programme, the company offering you the benefits not only knows your name and address but is also privy to your spending habits, redemption patterns and other unique consumer information. They can use this data to spam you with ads or sell this data to other parties. However, with crypto-based loyalty programmes you get higher levels of privacy and anonymity. Your transaction details are linked only to a wallet address, and it would take a fair bit of investigating to link this address with a real-world identity. Lastly, crypto-based rewards can appreciate tremendously over time. That being said, these assets can also dip in a similar manner. However, most companies offering crypto-based loyalty programmes would have some sort of fixed value to ensure you are safeguarded from the market volatility of cryptocurrencies.”

Raconteur: “Bridging the gap between cryptocurrency and traditional loyalty programmes, crypto rewards offer brands another way to connect with fickle consumers who are less attached to specific brands and more likely to shop online or via social media. Rather than collecting a retailer’s in-house points that can only be spent in one store, the idea is that consumers earning crypto rewards will be able to spend that currency in an increasing number of stores, invest it or use it to purchase NFTs.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.

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