Why loyalty programs and blockchain are a perfect match?

Two different (or not so much) worlds. We already know that loyalty programs are the established tool for customer retention in shopping, be it online or brick-and-mortar. But the reality is that although widely used, loyalty programs are not matching customers’ expectation.

Here’s where blockchain comes in. It is an emerging technology, currently shattering paradigms and disrupting one industry after another. Taking a step back from all the hype surrounding blockchain and cryptocurrencies, can this novel technology be used to improve customer’s shopping experience and solve the current issues most loyalty programs face?

What are the main issues of loyalty programs?

There are a couple of major issues with current loyalty programs, which result in loyal customers not getting the impression of preferential treatment. First and foremost, loyalty points are absolutely illiquid, which means they are essentially tied to a single retailer and not applicable anywhere else. What is more, loyalty programs are usually extremely slow — when was the last time you felt accumulating loyalty points was fast and cheap? Precisely. The second big issue of loyalty points is cross-border spending, which is still not possible with most programs, despite the ongoing globalization process. In order to understand whether or not those issues can be solved through blockchain technology, we have to analyze its benefits first, as this new technology can’t be used as a ‘quick fix’ for any industry (despite the hype).

What are the main benefits of blockchain technology?

The benefits of blockhain technology are many and span across several areas, so only the relevant points will be highlighted in this article. Firstly, blockchain allows for instant, decentralized (peer-to-peer), cross-border payments through cryptocurrencies. This means faster transactions at a lower cost. Secondly, the technology allows for a distributed ledger containing all transactions, resulting in a transparent and trustworthy system. All in all, blockchain allows for faster, cheaper, safer and more transparent transactions through cryptography and distributed computing. Sounds great, right? But how does this relate to commerce and loyalty programs?

How do both worlds connect?

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. Simply put, customers are now able to spend their loyalty points earned from Retailer X in USA at Retailer Z’s shop in France. Furthermore, the technology adds value to businesses as well by lowering transaction fees as all transactions take place on the Benebit network. By using the Benebit App, retailers are also able to collect customer data, track inventory and manage staff. How has this not been thought of before?

Blockchain is all the hype today and there are countless projects, which claim to be disrupting industry X or Y through decentralization when in reality they provide little value. This doesn’t seem to be the case here, as Benebit actually provides a way for both customers and businesses to capitalize on their interaction by improving customer experience and optimizing point of sale and customer retention processes for retailers. All in all –an experience that is mutually beneficial for everyone involved.

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