Have you ever opened up your wallet and stared at the scores of loyalty cards, threatening to burst out from their slots? Maybe you have that unused offer from your airline frequent flyer program where your miles can only buy you half a seat to Aruba.
If only there was a way to combine all your loyalty points to give something that offers actual value.
The Problem with Current Rewards Systems
Likely, the scenarios above resonate for you, like many other loyalty program members. There is no doubt that millions of consumers find reward programs frustrating, hard to redeem, and often confusing.
While efforts have been made to connect many different rewards, more can be done to offer customers better value for their money. A 2015 survey by Deloitte shows that over 3.3 billion people had enrolled in various loyalty programs at one point or another. That is a huge number of potentially disgruntled customers who could be persuaded to remain loyal if only their experience with reward programs was more positive and offered something of true value to them.
Is Blockchain the Answer?
Blockchain has been hailed as the next technological marvel. Largely used by fintech, the blockchain model carries well into other industries as well. In the article "Why Blockchain will Revolutionize Customer Retention and CRM," Simon Spyer explains the blockchain phenomenon in layman's terms.
Defined as a digital ledger, blockchain is able to store assets which are safely encrypted. This database can be updated continuously in blocks and linked with a time stamp, allowing transactions to be done in real time. The data can be monetized and exchanged with other users securely, taking out third party involvement. The ramification is huge since this would mean frictionless trade between two parties without the need of any banking transactions and related costs.
Blockchain Leads to a Better Customer Experience
In terms of loyalty programs, Spyer went on to explain that points from different programs can be uploaded onto the same database into a "digital wallet." This would mean that all the different points can be accrued into a single cryptocurrency, to be exchanged for bigger rewards. The nature of blockchain technology will also mean the customer can access and manage his account easily, in a safe and secure environment, and in real time.
Barring the cost of set-up, the cost of running a blockchain loyalty program like this will be a fraction of what it costs running separate programs. The savings in efficiency can be used to offer better rewards and expand the program. The security offered by blockchain can also prevent the system from being abused.
While we are some distance away from adopting a blockchain loyalty program, the advantages of having one is manifold. The frictionless manner where customers can accrue and exchange rewards will make this a positive experience; after all, a happy customer translates to a loyal customer.
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