Blockchain tech redefines the loyalty program ecosystem by providing a platform that interconnects different brands’ and organisations’ loyalty programs As much as profitability is a paramount to businesses and marketers, securing customer loyalty is a very vital aspect that must never be ignored. Getting customers to purchase your products or patronise your brand once isn’t […] The post Blockchain tech is redefining how businesses gain and keep customer loyalty appeared first on e27.
21 Mar, 2019E27.CO
As much as profitability is a paramount to businesses and marketers, securing customer loyalty is a very vital aspect that must never be ignored. Getting customers to purchase your products or patronise your brand once isn’t good enough, the goal is to ensure that they remain loyal to your brand, evident in repeat purchases. A customer once loyal to a brand has the potential to attract other potential customers to the brand.
In order to maintain customer loyalty, marketers employ several promotional strategies one of which is the development of loyalty programs and rewards. With this system customers get cards and earn loyalty points with which they can use to get incentives or rewards from the same brand. This reward system is being practiced globally by thousands of brands in an effort to maintain loyalty of customers to their brands.
Whilst creating loyalty programs are essential for brands as part of gaining competitive edge, one must not also overlook amount of resources these brands put into these programs. The important question here then becomes a question of effectiveness and efficiency. Do these loyalty programs generate the leads they were meant to generate? How profitable are these programs to the organisation? Do they really stimulate loyalty to justify the amount of resources expended?
A recent survey carried out in the US showed that average consumers are only active in 6 out of 13 loyalty programs they sign up. This in essence means the rest of the programs they sign up with end up being dormant and not effective in stimulating their loyalty. This is mirrored round the world as various brands and organisations have developed thousands of loyalty programs with lots of consumers signing up for these programs and only using up about half of them.
When loyalty programs are signed up for and not used, that only signifies one thing — ineffectiveness. This in other words, show there’s something missing that needs to be addressed. Customers need to go along with what these programs were designed for.
Within Canada and US alone, there’s over $100 billion worth of loyalty points that have remained unused. This shouldn’t sound strange as it’s no news how customers don’t engage most of these loyalty programs. A coupling fact is also the issue loyalty cards given to the customers. Each brand has its own specific loyalty card which in turn piles up in the hands or wallet of the customer. This makes it even more difficult for customers to keep track of what card they have and how much point they’ve earned.
It’s also worthy to note that most of these programs, if not all are exclusive to each brand. This implies, each loyalty program is specific to the brand and cannot be used across other brands to obtain rewards. Points earned on one brand are not transferable to other programs hence, the consumer is not fully motivated or stimulated to make use of them especially when most of the points are not enough to claim any reward of some good value.
The effectiveness of loyalty programs can only be enhanced if measures are adequately taken to stimulate consumer engagement with the programs and also create the possibility of universal usage of loyalty points.
Also read: The art of customer loyalty
Since the advent of blockchain, there has been a myriad of applications and developments leveraging on the technology in many different fields and sectors. The loyalty sector however, is not being left out as blockchain company Appsolutely has developed ways leveraging blockchain technology to redefine the loyalty program ecosystem. The framework not just only ensures consumer engagement with loyalty programs but also a platform that makes room for interconnectivity across different brands’ and organisations’ loyalty programs.
The company recently created a universal mobile app that enables users earn and redeem points anywhere, anytime — LoyalWallet. Their aim is to create the world’s largest loyalty network where points from thousands of different brands are interchangeable.
This will in a greater way stimulate more consumer engagement with these programs and a better incentive to use up loyalty points. When consumers know they can use points across different brands, they remain motivated to keep track of points and also use them up.
This technology has opened opportunities for business collaborations with companies in multiple industries, as well as international recognition. The company, based in the Philippines, became the trusted loyalty system provider for the country’s biggest brands.
With the platform, all consumers need to do is download the universal customer loyalty app for free. Users can earn credits when they transact with participating merchants. Instead of traditional loyalty points, they will get credits that will also accepted at other brands within the network. The credits can also be used to purchase discounted vouchers and coupons worldwide. Users can use their LCredits to purchase miles and vouchers from global brands like Walmart, Amazon, Starbucks and several others.
The development of this framework is indeed laudable as marketers and brands will have full knowledge of the effectiveness of loyalty programs whilst consumers will be more inclined to increase their level of engagement with the loyalty programs, thus accessing rewards. With blockchain as the backbone for this framework, transparency, security and interoperability are some of the features rest assured will be fully guaranteed.
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