Loyalty Salvation through Blockchain? Maybe.
We monitor the world of loyalty fairly closely on a day-to-day basis and from this corner of the world, some of the most exciting developments in this realm are coming from blockchain-based projects.
The promise of self-validating transactions, of true platform-agnostic utility, of near realtime settlement, etc. is beginning to exhaust the list of superlatives used to describe them.
Just for context, we’re not just casual observers either, we interact with both the players and the platforms on a regular basis, listening to some of the brightest minds in marketing, loyalty and blockchain technology talk & think through what this all could mean.
Here is a list of our current takeaways from those sessions. Please note the use of the word “current” as this list will most assuredly change over time.
- Adopting blockchain would enable companies to rapidly add and maintain loyalty partnerships without adding complexity to their programs.
- Due to the decentralized nature of blockchain, the fees companies incur are minimal.
- When data is transferred across a blockchain, the transaction is open and viewable to all, but the information of the sender is secure and encrypted.
- Blockchain-based loyalty may have just crossed over into the mainstream as evidenced here. And even over here.
- Transferability: Tokens could theoretically be exchanged across other businesses or services, allowing customers to freely choose how to redeem for rewards, discounts, and more, all which encourages repeat engagement. Rewards or tokens become equity, monetizable to consumers.
- The timing of GDPR could bring some unanticipated complications to deploying blockchain-based systems at scale. Even though blockchain provides (theoretically) enhanced security, GDPR rules are still being written around the world.
To be sure, there are a multitude of factors to consider when thinking through your blockchain “go / no-go” decisions. Howard Schneider, VP of loyalty strategy at Kobie Marketing makes a valid point. “The kind of universal marketplace that is being proposed by (blockchain loyalty providers) runs counter to the core reason why a brand launches a loyalty program in the first place. “A brand’s loyalty program, he pointed out, is designed so that consumers get a benefit from shopping with the brand. But the benefit, he noted, only helps the brand if it is redeemed at the brand.”
Mike Giambattista is Editor in Chief at The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).
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