Blockchain is a trustless distributed ledger in which different agents can interact. Participants are:
They can interact in one system without intermediaries or third parties.
For loyalty rewards program providers, It is considered that blockchain has the potential to facilitate the implementation and management of their programs with complete transparency, resulting in significant cost savings. For loyalty rewards programs that currently have a competitive advantage, including their level of interconnected networks, joining a blockchain-based network is beneficial. We believe it’s a compromise because you can control how your customers interact with their rewards program or other loyalty programs.
Selling to existing customers costs significantly less for your brand than gaining new customers. This is the reason behind why over 90% of companies have some sort of loyalty program. Rewards points are the most practical methods for boosting customer loyalty and earnings. For example, the Starbucks loyalty plan is one of the most successful worldwide rewards programs. It drew about 19 million members, with the redemption of points responsible for approximately 50% of the company’s income. Starbucks utilizes Starbucks Rewards regarding its business objectives to add value and increase customer engagement through a fun, gamified strategy.
Starbucks’ method demonstrated that an effective loyalty program is not a one-size-fits-all solution, but a carefully tailored program can do astonishments for revenues, engagement, and retention. Due to the elaboration of digital assets, brands are now able to offer their consumers a unique and exceptional experience.
Undeniably, loyalty and rewards programs are essential components of the consumer-brand relationship; however, they have limitations. Namely, Complexity, lack of liquidity, and interoperability are some of the main obstacles to expanding loyalty and rewards programs. The unclarity of program rules causes much value left as a liability.
According to Clarus Commerce, 75% of consumers chose to be rewarded for engagement exceeding their purchase. It signifies the need for innovation and creates a massive opportunity for brands to revolutionize their loyalty programs.
Most points and rewards are usually limited to their respective brand ecosystem, which consumers cannot employ for another company’s offers. These programs lack interoperability, and points are trapped behind a walled garden, restricting value movement. Restricted value transfer and lack of communication between programs result in lower customer engagement.
Point systems would be much more successful if they more closely resembled cash in their ability to be spent. Despite these varying degrees of liquidity, what appears clear is that brands welcoming this change are looking to catch consumer attention by presenting as much flexibility as possible in the usage of points currency.
Loyalty tokens, which can be transferred directly into the consumer’s wallet, offer brands a novel way to connect with customers and gain insights to retrieve the market from competitors.
Also, brands and SMEs can accumulate user purchasing histories on the blockchain. It’s comparable to loyalty points but less intricate, more liquid, and ultimately more helpful.
Consumers feel empowered and perceive more excellent value when receiving crypto in their wallets instead of receiving points. For many, brands are an identity character. For instance, Gucci recognizes you as an ambassador and airdrops Gucci tokens to you to appreciate you for posting positively about the brand on social media using your “GucciCoin” hashtag. If you possess a particular amount of “GucciCoin,” you may acquire access to an elite community. It can be a physical space or an online event. Possibly costumers even get access to advanced or limited-edition merchandise drops others wouldn’t get and receive an NFT that allows you to showcase your status. Loyalty tokens are a win-win for brands and customers, enabling customers to show their support while brands boost engagement and loyalty.
In conclusion, Loyalty Tokens provide a gateway for an interoperable, liquid, and frictionless future. Mobiance provides a loyalty platform in which brands can reward their loyal customers with cryptocurrency. Customers can redeem their rewards or hold them in their wallet for further redemption opportunities.