The ‘idea fix’ of token loyalty and tokenization of loyalty
By: Grzegorz Sperczyński. Tokenloyalty.io ICO.
Basics
The idea of a loyalty program bases on two things:
- to bring back customer to desired effect (let’s say call to action)
- to create a demand on the product that is resistant to competition’s efforts
Merchants put a lot of effort into it — which costs a lot of money. But tokenization of many processes may lower the entry costs to minimum, basing on environment and society focused over the tokenloyalty token.
Introduction to case study
Company that wants to create a specified campaign buys tokens in frames of a specified budget. This way, initial contributors of the ICO may establish the value on the second market. This way the company that creates a loyalty program for the brand may extend the amount of the network of users of the loyalty program. This way present token holders dictate the entry price (decentralized model), with no harm to entry costs (because token behaves like money).
This way, previous token holders state the initial network of Loyalty ecosystem with stronger basic value — but with the same opportunities to get additional value of goods. New customers originating from the new created campaign are entering the system of access to goods offered in the marketing campaign.
For example, new customer (who participated in soda drink campaign) may log on to the platform and use the codes from under the cup to get the tokens into own wallet and get access to goods offered in the promotion campaign. The present token holders may have the access instantly stating the “initial network”. The network grows with each campaign so the system generates more and more potential customers, being more and more attractive to the advertisers. This states a network of participants of the campaign and wallet for the loyalty points. The company may reserve a specified share of tokens into generation of new N-addresses that will be the future wallets for the new participants of the promotion.
On the other side — if the network is quite extended, entry barriers lower with each campaign — like in ads budget on popular platforms.
Case study
Happy Company Example LTD wants to make a loyalty campaign for present and future customers of the Happy Example Drink. It decides to use 150k USD for the campaign. 50% of this budget will go to present network of token holders in form of free drinks to be collected, the other 50% will be for the generation of new tokens exchangeable to these drinks after registration into the LYT your lifeTM system. This tokens may be tradeable to any good available in the campaign of the Happy Company Example LTD or our network that will be built, or just held for the future by the users for better times. Merchants should not be afraid that they may lose customers for other campaigns. Campaigns will be constructed such way, the token behaves as a ticket to open desired prizes of multiple campaigns. This way ANY campaign influences positively ANY OTHER campaign by adding new customers to the ecosystem. Because the Happy Company Example LTD had to buy these tokens on the market, participants of the ICO were in the privileged position — the could sell their tokens for the specified amount to the advertiser or just wait for the access of goods. This caused the value of the token to increase (basic value). Additionally, tokens were the key to goods network, which granted them a special access (added value).
Case study no. 2
Another Company LTD wants to make another campaign. It has to buy tokens for this campaign in the same model as Happy Company Example LTD. This way people that participated in the previous campaign and did not convert their “points” into goods with stored tokens on the platform, may sell them with higher price, the new ones from the Happy Company Example LTD company campaign may automatically enter into the campaign of Another Company LTD. This is how the network of loyal customers grows being granted for activity..
Token would be traded on the platform for each campaign, as well as on normal exchanges. This way no one ever loses his right to get profit from loyalty points. The difference is that for the moments of the campaign, they are becoming a blockchain ID and should be locked (into the campaign) for the moment of the campaign, like “in a game”. If you don’t want to participate — you just trade the token on exchanges or use is as a “ticket” to goods placed on the platform. Any time one may resign from the loyalty selling tokens or get back whenever the campaigns become more attractive, just simply buying tokens and placing them on the platform.
The model of relation “in the back-end” which means consulting services between advertisers, network and distributors
The main problem in relation of distributors and advertisers affecting customers is that there is logistic problem in the supply chain. Main reason for that is is that not all the distributors want to participate in such programs as there is a lot of refunds and other systems that create a real problem for distributors in realization. Distributor may encounter barter exchange problems that causes lack of financial turnover on goods. For example — company selling ice cream may offer random free ice cream in form of code printed on the stick that holds these ice cream. Customer goes to a distributors that receives the stick and gives a free ice cream to the customer. But distributor does not get cash for the stick. He receives another ice-cream. So if the probability goes in such way that a lot of customers realizes the promotion, he may never sell the real product but distribute the free ice cream which does not generate a financial turnover. This goods may be backed by the token that may be exchanged into real cash, so this way turnover is still possible, finally not affecting the customer, who receives the ice cream.
In some corporations there may be a problem in budget planning of such marketing campaign. There are assessed goods volumes, probability of distribution of loyalty points and other factors of the marketing campaign. But still it is difficult to track its success. When advertiser has a proof of network represented by blockchain with token backed goods, it will be easier to plan campaigns in model presented on the side of the customer.
How we want to build initial network? Budget for initial campaigns
Participants of the ICO state an initial network of people that want to benefit from the loyalty campaigns. It is very similar to the bounties engine, but this is constantly increasing. If the network grows, it becomes more and more attractive for campaigns, the more attractive campaigns, the more users of the loyalty program is getting into it.
HOWEVER — we need to attract also distributors and advertisers through marketing cases. Network is a tool, initial network may be too small for big campaigns. So we constructed the model to create the growth of the network by ICO, tokenizing the network. Simple? :). Help us build the network and join our ICO soon: https://tokenloyalty.io/
ICO site: https://tokenloyalty.io/
Telegram: https://t.me/tokenloyaltyico
Facebook: https://www.facebook.com/tokenloyalty/
Twitter: https://twitter.com/loyaltywife
Bitcointalk: https://bitcointalk.org/index.php?topic=2293442.new#new
