In the digital age, every loyalty program needs an overhaul
Businesses that value their customers reward them for their loyalty.
It’s a sure-shot way to guarantee that your customers will do business with you again. Or is it?
Rewards and loyalty programs were valuable ten, maybe five years ago, but in today’s digitally connected economy, they’re not as coveted, respected, or appreciated.
The modern customer doesn’t dine at the same restaurant every weekend, fly the same airline to the same destination every summer, or stay in the same hotel when traveling for work or pleasure.
However, they do buy their coffee at the same shop, on their way to work every morning.
People today, powered by the internet, either seek great deals, or chase new experiences, and whatever they do, they want to be spoilt for choices.
As a result, existing loyalty programs are no longer enticing.
However, imagine there was one loyalty card that allowed you to earn points for everything you bought, no matter where you bought it. You could accumulate all your points and spend it all, on anything, in any shop or establishment, anywhere in the world.
Using blockchains and cryptocurrencies, such a loyalty program can be created – but it’s final success will depend on its ability to onboard vendors and partners. The more stakeholders it has, the more successful it will be.
“Blockchain is an ideal remedy for what ails loyalty rewards programs,” said report by the Deloitte Center for Financial Services.
Backed by a distributed ledger, shops and establishments that sign up can reward customers for transactions with digital tokens (cryptocurrencies) that are listed on an exchange and can be exchanged for cash, or alternatively, redeemed at the same or a partner establishment.
“For consumers juggling an array of loyalty programs, blockchain could provide instant redemption and exchange for multiple loyalty point currencies on a single platform. With only one “wallet” for points, consumers would not have to hunt up each program’s options, limitations, and redemption rules,” said an Oliver Wyman study from last year.
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Gabriele Giancola, CEO of qiibee, a blockchain based loyalty program offering with a few successful partnerships already under its belt explained to TechHQ why the idea is catching up with small businesses around the world.
“Blockchain-based loyalty program tokens are fully paid up, so they don’t show up as a contingent liability on the balancesheet of a company. They’re also fully integrated with the ecosystem, which is beneficial for all partners in the long run,” said Giancola.
Consumers want to be rewarded, so the business strategy of creating, or nurturing, loyalty through rewards programs is sound.
But the execution of loyalty rewards programs in their current form is inefficient.
Blockchains have a great solution. In fact, the nascent state of blockchain for loyalty programs, offers an opportunity to realize the value of disruption and shape its future impacts, for whoever decides to help craft the next generation of loyalty programs.