The reality of cashback programs and the future of customer loyalty

We’ve all been participating in customer loyalty programs or taking advantage of the so-called cashback incentives. At gas stations, at the local retailer, in Amazon and at every single retailer looking to retain their customers. Although known as the preferred customer retention tool, the truth is these programs rarely have the desired effect.

What is the current landscape in cashback programs and how are they performing?

According to a survey by Loyalty360, 83% of consumers participate in at least one loyalty program, and 13% participate in more than five. If so many customers are participating, they must be working right? Wrong! According to COLLOQUY, 57% programs were cited as being too slow or unappealing. Actually, the efficiency of those programs is tragic. Most programs are too slow and absolutely illiquid, as a consumer can only spend his or her “points” in the same retailer and often loses them after a certain period.

What does the future of cashback programs look like?

There are several big trends influencing the future of cashback programs. Firstly, the purchasing power shift to millennials. Secondly, the process of globalization, which sees people being less inclined to live their whole lives in one place. Thirdly, digitalization, which increases utility, meaning cheaper and faster transactions. With those factors in mind, it’s perfectly logical that customers are not satisfied with a few cashback points that can only be spent at a single retailer in a single geographical area. The whole customer loyalty sector is in urgent need of disruption. Customer need loyalty points, which can be instantly spent anywhere, at any given time. And blockchain just might be the answer.

Blockchain? How would you connect cryptocurrencies and loyalty programs?

Benebit.io is a blockchain startup, which aims to revolutionize the world of cashback and loyalty programs by adopting blockchain technology. The Benebit App allows customers to shop and collect Benebit Tokens (BNE), which can be exchanged for any crypto or fiat currency.

Why would retailers ever do that?

By enabling brands to interact with consumers through the Benebit app, retailers are able to collect data, save on transaction costs and manage their internal processes, such as inventory and staff payroll. Benebit is actually looking to setup a win-win scenario for both consumers and brands by creating a decentralized shopping ecosystem, which offers value to both parties.

Although blockchain has its opponets as an emerging technology, we are confident that it has a great spectrum of application possibilities for the retail industry and ecommerce looks to be in need of a real sector change to become more intuitive, modern and customer-centric. The next logical step in its development, undoubtedly, lies with the adoption of blockchain technology, spelling exciting times ahead!

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