Customer loyalty is one of the cornerstones for every successful business, which is why it is no surprise that many businesses offer club memberships, frequent customer rewards and many other loyalty program incentives to their customers. However, the massive multitude of clubs and programs can be frustrating for customers to navigate, as they try to maneuver between the numerous club cards in their wallets and online, often finding it difficult to keep track of their point status and where they can be redeemed.
While cryptocurrencies made a splash in recent years, making headlines and causing general public interest, it is the underlying blockchain tech that is proving to be the real game-changer. The ability to transfer and verify information on a decentralized network opens up many possibilities across multiple industries and could become the new standard in many ways – including customer loyalty.
Using blockchain tech for loyalty programs is already showing great promise as several of the world’s biggest brands have already converted some or all of their programs using the technology. The ability to manage a large customer base while maintaining perfect tracking of each client’s token count, without the need for a central governing entity, is a major step up in this industry, which sees $360 billion in points go unredeemed each year. From airlines to small restaurants, it seems that any business can harness the new technology to benefit customers as well as themselves.
Major Brands Are Making the Move to Blockchain
On top of the decentralization and easy tracking, another main advantage of blockchain is the ability to exchange and redeem tokens of values, such as frequent flyer miles or phone minutes. While this ability is widely in use on cryptocurrency platforms such as Ripple and Stellar, it is also being used in other industries.
One such example is Singapore Airlines. Considered the best airline in the world, Singapore is also a pioneer in using blockchain for its business, introducing a loyalty program built on the technology. The advantages of Singapore Airlines’ loyalty program are twofold: Using blockchain to track each customer’s account status to accurately reward them with miles, and enabling clients to redeem them with other service providers that are partnered with the airline. Launched last July, if the loyalty program takes off, it could become the yardstick by which all other airline clubs are measured.
Naturally, blockchain-based loyalty programs are not limited to airlines. Car rental giant E-Z Rent-A-Car has also created a similar program, which includes features such as payment with cryptocurrencies and even redeeming points for crypto assets within the company’s app. Japanese technology giant Rakuten, HP, and many other companies are also in the process of creating blockchain loyalty programs.
Bringing Blockchain Technology to SMBs
But what about the little guy? Many small and medium businesses (SMBs) don’t have the resources to develop their own blockchain networks, but would still benefit from the advantages it has to offer. For that reason, several companies have begun offering services which take care of the infrastructure and enable these businesses to build blockchain-based loyalty programs of their own.
The Building Blocks of Brand Loyalty
As blockchain solutions become more widespread, it is safe to assume that a growing number of brands will implement blockchain into their loyalty programs. Larger brands will most-likely build their own blockchain, or use the services of companies such as IBM, which is already offering an API for creating loyalty programs.
As a growing number of businesses are looking into blockchain tech, it seems that these solutions could prove to be the holy grail of customer loyalty.
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