How Blockchain Is Transforming Customer Loyalty
Adobe recently completed the acquisition of Magento to pave the way for a new digital era of experience-driven commerce. However, securing customer loyalty and engagement have been notoriously difficult to achieve throughout recent years due to inefficiencies and the fact that nobody really wants to download an app for every airline that they have traveled on.
From banks to airlines, the dark art of creating a successful reward program or loyalty scheme is notoriously difficult. Loyalty fatigue usually sets in when we realize that we will never be able to accumulate enough points to make it worth investing our time and effort. A lack of consistency and frustrating experiences across a myriad of programs suggests we need something better suited to a new digital era.
There is an increasing belief that Blockchain is the perfect technology to unite users, providers, and administrators and bring them into a single system without breaching privacy. Blockchain could store and analyze a customer’s entire purchase history and provide an entirely personalized rewards system.
These transformational changes and possibilities are already beginning to gain momentum. For example, Singapore Airlines and Delta Air Lines are heavily rumored to be investigating replacing air miles with cryptocurrency. There is an argument that we are currently experiencing the digital transformation of the loyalty program.
Introducing loyalty at the beginning of the customer journey, rather than at the point of purchase could make all the difference. Blockchain has the potential to create a new generation of loyalty programs that are actually useful, easily accessible and offer a more cost-effective solution for both brands and users.
Blockchain has gone from being just another industry buzzword to enter a period of real-world adoption. We are also seeing a number of decentralized blockchain-based loyalty ecosystems appearing where every loyalty program can be tokenized.
For example, the loyalty ecosystem built by qiibee is attempting to remove the limitations and restrictions by traditional programs. Alternatively, users can exchange their loyalty points for cryptocurrencies direct from their smartphones.
Many of the world’s biggest brand names realizing the importance of customer loyalty and engagement but rethinking how they approach it. By placing customer loyalty programs on a decentralized ledger that is unchangeable and transparent certainly seems like a step in the right direction.
In a world of experience-driven commerce, giving consumers more control over their loyalty programs and the power to manage and improve their customer experience feels like a step in the right direction. Retiring the age-old loyalty points scores with tokens that can be redeemed for purchases or even transferred between friends using their phone is a mouthwatering prospect too.
Gabriele Giancola, Co-founder, and CEO of qiibee recently provided a vision for the future of loyalty programs. “Let’s say I use Starbucks and you use Subway. Maybe I want to eat a Subway and you want to get a coffee. We can exchange our points so you get your coffee and I get my Subway.”
This was a scenario that everyone can understand, but blockchain is paving the way to bring a new solution to an old problem. Why shouldn’t loyalty be more efficient and user-friendly? And isn’t it about time that the experience is enhanced for both brands and consumers? We are already beginning to think differently and learning how to leverage blockchain technology to solve real-world problems.
The technology is also becoming invisible. A consumer does not need to understand what blockchain technology is and how it’s streamlining transactions between parties. Or even that it is also facilitating trust, increasing transparency and removing unnecessary third parties from the equation. They are simply provided with a seamless experience across a myriad of devices.
However, make no mistake loyalty is big business. it’s a $360+ billion industry. Right now, the average US citizen is a member of 29 different loyalty programs. But half of these accounts are inactive. More concerning is the fact that 30 percent of users have never redeemed a single point.
The current system is undoubtedly broken and ripe for digital disruption. With the emergence of an increasing number of blockchain based loyalty solutions, the race is on to transform the loyalty program space. The blockchain revolution is just getting started and early adopting retailers are likely to reap the biggest rewards.
Every industry is heading for a period of technological disruption on our way to Web 3.0. The customer loyalty market is just one of many examples of the exciting road ahead.