Blockchain and Loyalty – 1
There has been much discussion on blockchain and loyalty in recent years. Here is a sampling.
ICF Next: “In loyalty, blockchain capabilities tease the idea of portability or fungibility of loyalty currency to consumers. This makes sense – of course consumers would be excited by the opportunity to easily trade or exchange points into cash or another currency. While this ability may prove attractive to customers, it is typically at odds with a program’s goals to generate brand affinity, control point liability and cost, and drive redemptions of the brand’s products and incremental business. Certain industries, however, could see immense benefit from this approach. Industry experts suggest the travel industry is ripe for a blockchain-based innovation. While retail and credit card programs are usually simpler in design with a single currency and few partnerships, travel programs are more complex, with multiple currencies and partnerships that have different earning rates. Blockchain could support a near-real-time and secure record of loyalty transactions: earning, redeeming, exchanging, transferring, etc.”
Clutch: “Although loyalty programs are substantial, they are also fragmented; there are too many loyalty programs, each with its own way of earning and redeeming. This can lead to frustrated customers and a lot of unused points… Most loyalty programs are very limited, which discourages customer engagement. Customers can usually only redeem points with the same retailer they earned them from. Placing limitations on how and where to spend points decreases the loyalty program’s overall value. Through blockchain, companies can decentralize their loyalty programs and capitalize on blockchain technology benefits … a more streamlined experience, loyalty rewards that increase in value, a safer experience for everyone, an investment that pays off, and a more efficient process.”
BigCommerce: “Blockchain technology can solve for some of these issues with traditional ecommerce loyalty programs by connecting owners and users of multiple programs. This technology can simplify the process of applying and keep consumers from having wallets overflowing with rewards cards or passwords to multiple different reward accounts. These tokens never expire or lose value, unlike traditional reward points.”
Deloitte: “Customer loyalty and engagement can make or break companies, and as such, rewards programs represent strategic investments for all types of organizations. But as they have been growing rapidly, they are also still ailing due to inefficiencies. There are several reasons for this, but first and foremost is we believe the paucity of uniform management systems is a primary source of members’ lack of activity… The implementation of blockchain can drive the customer experience to the next level, and here’s how: reducing costs, enabling a frictionless system, making the process near real-time, providing a secure environment, and creating unique business opportunities.”