Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 6)

Blockchain and Loyalty – 3

Beincrypto: “The rise of NFT utilities is going to lure more brands to leverage NFTs as a new marketing tool, whether that be for brand rejuvenation or member engagement …. Properties of NFTs can be treated as membership levels. Someone might have a NFT with rare attributes – just like owning a Platinum membership card. By filtering wallet addresses with NFTs, brands can easily identify these holders and airdrop exclusive rewards to them (thanks to the transparency of the blockchain.)

Wise Marketer: “Cryptocurrency will reduce the number of parties involved in advertising campaigns. Modern digital advertisements involve four parties: the consumer (you), advertiser, content creator, and platform hosting the advertisement (e.g., Google, Facebook, YouTube). With blockchain advertising, advertisers can eliminate the platform that hosts advertisements. Instead of paying them, advertisers will upload their advertisements to a blockchain and the blockchain will make them available to its platform users. In short, the future of digital marketing limits the interacting parties to three groups: the consumers (you), advertisers, and the blockchain supporting the transactions between the consumer and advertiser.”

Coindesk: “Although loyalty points have some attributes in common with cryptocurrency, it doesn’t mean they are the same. One of the biggest differences between crypto and loyalty points is centralization. Because cryptocurrency and crypto wallets are decentralized, the value of those tokens can fluctuate with market demand. Loyalty points will almost always have a fixed value set by the program, which can change based not on community activity, but rather what is most profitable for the company. Furthermore, decentralization means cryptocurrency transactions are more anonymous than those in loyalty programs. Although your wallet address is logged on the public ledger, it takes a lot of investigation to link an individual with a wallet. With loyalty points, the program or financial institution knows not only your name and address but also knows your spending habits, redemption patterns and other unique consumer information, which allows them to advertise to your tastes – or sell data to other parties. Finally, while we can constantly track the value of cryptocurrencies in relation to fiat in real time, loyalty points often don’t have a cash value. A loyalty program user can’t go to the loyalty program and ask to redeem points for U.S. dollars, euros or other hard currencies. Instead, once the money is spent and points are earned, they are locked into that loyalty system. If you can’t use those points, they literally hold no value.”

Talon: “Beyond just awarding NFTs to high value users, using the interoperability of the blockchain and existing ecommerce platforms or microservices could see the emergence of rich loyalty and promotion strategies, with crypto underpinning it all. Gaming mechanics…use NFTs to award benefits or loot to characters, and those NFTs are potentially migratable between games. Imagine you could buy a sword in an MMO but then also redeem that sword’s associated graphic as a t-shirt or sneaker logo when you check out of a clothing store. Perhaps the user could store their accumulated loyalty points in their crypto wallet and use it across brands.”

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.