Point Systems and the Blockchain
How can the blockchain help struggling point systems?
The ASSEMBLE Protocol is a blockchain-based global point integration platform that exploits ASM utility tokens, whilst establishing a business ecosystem that can integrate, utilize existing points and miles with point providers, consumers, and retailers.
Hello, dear readers!
Today we’ll take a look at how blockchain technology can help revolutionize the current loyalty point systems. As we all know, it’s hard to manage our points, but blockchain can bring all those points together so that we can actually use them before they expire! One important thing blockchain companies have to keep in mind, though, is the user experience! How can we deliver quality technology that the average person can easily access? Read on to find out!
Point Systems
Marketing with Point Systems
Companies engage in a number of marketing activities to attract new customers and retain existing customers. Giving away points and issuing coupons are standard marketing methods.
Point programs let customers earn points at a certain rate depending on what the customer buys or how often they use a service. Consumers are also able to purchase products or use services with their points. Customers prefer coupons over discount coupons because they feel like they are getting a better deal. Loyalty point programs and coupons are known to be more effective in attracting consumers than simply offering discounts.
Problems with Current Point Systems
Recently, however, points and coupons have become less useful. We will outline three problems with current point systems below:
First, since many companies operate their own point systems, it is difficult for consumers to manage each system individually. It is not easy to remember whether a particular brand has an ID or what that ID is. In addition, each brand has different point accumulation methods, usage restrictions, and expiration dates. Some places won’t let you use your points until you reach a minimum amount of points, while other places delete your points if you don’t use them by a certain date. Some places require a card while others don’t. Unless you use the brand frequently or memorize all of the companies’ point program rules, you may not be able to use your points and they will expire.
Second, it is difficult for small business owners to run a mobile point system, which has led to a decline in the competitiveness of small business owners. Although services such as OK Cashbag and Kakao Gifticon work with a variety of companies so that their customers can accumulate points or use their coupons on mobile, most of the subscribers are franchise-sized companies. Most people prefer to send their friends a free Starbucks coffee rather than a random coffee brand they’re not familiar with. It is much more expensive for independent stores to register their coupons and points than it is for large franchises. Therefore, local cafes issue simple coupons such as “1 free drink if you collect 10 stamps.” However, these coupons are more difficult to manage than mobile coupons for customers as they’re easy to lose and don’t give much return on their investment. Therefore, local stores are bound to lag behind franchises.
Third, consumers do not have full ownership of their points and there are too many restrictions on what consumers can buy with their points. For consumers, points have the nature of property rights. However, consumers do not actually have full ownership of their points. Having ownership would mean that customers could transfer or sell their points, but many companies have prevented the transfer of points between consumers. This leaves consumers frustrated and confused.
Points Meet Blockchain
By introducing blockchain technology into the existing point and coupon system, it will be possible to integrate and manage points in one system. Consumers will be able to exchange their points for things they actually need, thereby increasing their utilization. In addition, coupons can be issued as NFTs for numerous products in various stores to expand their reach to more shoppers. As a result, consumers will be able to conveniently receive and use mobile coupons at local stores throughout the country.
These are just a few of the ways we can overcome the problems with the current point systems by using blockchain technology. However, blockchain technology still has high barriers to entry for the general public. Currently, the public’s perception of cryptocurrency, one of the most well-known use cases for blockchain, is not good. There are many concepts that are unfamiliar to ordinary users such as online wallets and private keys. However, companies that want to promote blockchain technology need to design services that are simple and easy to use to attract users.
To this end, blockchain companies are studying various methods to ease the adoption of blockchain technology. In the case of Kakao’s “Klip” wallet, it is already available within the Kakao Talk app, so users have no need to install the wallet separately. In addition, Klip manages the private key and uses a PIN password similar to the existing UX so that users can slowly adjust to blockchain technology.
Blockchain technology makes things possible that have been difficult to implement in the past. However, the key is to design technology that increases the utilization of the blockchain without compromising the user’s experience.
