The announcement of Dubai Points by the forward looking Government of Dubai, to be built by Loyyal, heralds a world first opportunity to deliver a blockchain based loyalty capability that also makes a distinct difference to the customer proposition and indeed the mindset of the brands involved.
Blockchain itself at a basic level is a protocol for the store and transfer of value so perfectly aligned to the collaboration and value reconciliation needs of the loyalty industry, just as it is for the banking industry and hence the strong interest and investment from the Financial Sector.
At a simplistic level a blockchain based ledger allows multiple parties to settle transactions between each other in a single and simplified way, removing friction i.e. cost and increasing speed so that settlement can be near real- time.
Whilst this backend settlement doesn’t today mean much to a bank customer for a loyalty programme member however they could be transacting with multiple partners in different channels and seeing their points balance go up and down literally every time they click or buy. This does already happen today but is enabled behind the scenes by a complex web of both technology data exchanges and detailed contracts and terms which all take time to set up — and where necessary take down again.
Therefore this is not the ‘backend’ capability that supports a modern, dynamic, customer centric and market responsive proposition in a way that creates value for all parties by matching shifts in supply and demand to optimise the value exchange. Instead the old fashioned ‘telephone switchboard’ with point to point cable connections can be replaced by a new digital version run by Loyyal for all. In this blockchain enabled scenario partnering permanently or more importantly perhaps for a very short term promotional opportunity is simply a matter of ‘dialling up’ the partner’s number and connecting at an agreed price for the customer benefit to be offered.
This significantly enhanced interoperability capability offered by blockchain technology at a ledger reconciliation level may not change much for today’s loyalty programme members. But it does power the propositions of tomorrow as a loyalty protocol for all to participate where commercial opportunity and customer needs match fortuitously, in whatever limited timespan and/or low cost environment is available.
So with Dubai Points and its focus on multiple partners leveraging the frictionless partnering environment the customer proposition will be very dynamic, shifting in response to customer needs and behaviours, reflecting the commercial opportunities of the brands involved and combined with external factors like the weather and even a level of randomness that uses gamification mechanics to deliver a highly engaging and motivating customer proposition.
Just consider the scenario where the lovely Dubai beaches are full of tourists because the sun’s out but mid morning it is getting a bit too hot, so we distribute an offer for ice cream in the local mall / shop encouraging people to come and spend an hour or so earlier than they might have. Hence Dubai Points will be filling the ice cream retailer and local shops and malls and hour or so earlier and ahead of time for the lunchtime rush with the resultant increase in overall spend. The flexibility of partners and data points coming together to make this a seamless and highly targeted experience is significant, but demonstrates the commercial opportunities of loyalty interoperability between collaborating partners.
Moving on from ledger based reconciliations into another unique blockchain capability is the unique and patent pending Loyyal capability to track and manage the source of issuance, any mid life transfers and the ultimate consumption of individual loyalty points. Whilst again this might seem like an interesting technical capability but perhaps with limited customer value the opportunity, when combined with a collaboration of partners is very significant.
Without delving too deep into the world of ‘coloured coins’ at a simplistic level this ability to track and understand a loyalty point across its lifespan is unique and unlike the previous ‘homogenous hopper’ approach to loyalty currency management. By this simple mechanic in a multi-partner environment a myriad of combinations of customer propositions can be created.
By enabling networks to create multiple programmes from the same base currency and then each programme to create partner promotions within that, the Loyyal proprietary technology achieves a ‘Russian Doll effect’ where one customer proposition, or in fact many, can sit inside the other at an effectively infinite level.
Mind boggling as this seems if we assume it is used in a collaborative partner environment the brands can agree to to create instant offers or longer standing co-branded promotions or even programmes that combine their commercial opportunities into a kaleidoscope of propositions that can then, through customer needs insight be matched to the right audiences with a very specific result. Effectively the blunt hammer of promotional loyalty points just became the sharp scalpel wielded by the combined experienced team of marketers across the participating brands.
These marketing teams can work together as we have seen from above in a highly interoperable environment and with the precision that reflects their combined insight into customer needs match to the cyclical, supply and demand driven variabilities of their business.
So back to Dubai Points and what this means to a member, in a simple and easy to understand and consume customer proposition. Well the scenario of collaboration means that a number of brands will be participating who already operate their own separate loyalty programmes and some that don’t but would like to. To a customer joining and holding all these programmes is wasteful beyond a point, but then they miss the value offered at other brands who would appreciate their attention.
In the Dubai Points programme it is a gateway to a world of value for its members. They can enrol once and enjoy a range of benefits from different partners and indeed decide to deepen their engagement with certain brands by joining those specific programmes. They will receive a range of personalised incentives for different behaviours and importantly also sets of behaviours i.e. ‘challenges’ in a gamified context. These incentives will shift as the market changes and also to reflect the members’ deeper involvement and personal preferences.
Members in Dubai Points will therefore accumulate value almost by osmosis, they will be rewarded for example for using those airline miles they have earned from a co-branded credit card for an extra special discounted redemption, from that specific retailer. And the trick is that is exactly what that member wanted to do in order to treat herself and buy something even more expensive than she could afford!
In summary the vision for Dubai Points built on the Loyyal blockchain technology solution is like embedding an automated medicine dispensary under the skin of the member. The programme will change to reflect what they are thinking and feeling, partners can combine and also decouple to respond to this quickly and easily and the net result will be a warm glow and increased Happiness felt by the member and in the balance sheets of the participating brands.
Stuart Evans (stuart@loyyal.com)
MD Dubai Points.
EVP, Loyalty Strategy
