Loyalty reward programs surround us. Millions of people are enrolled in hundreds of programs. But with $100 billion USD in unredeemed loyalty points serving as liabilities for companies and of no value to customers where’s the benefits? That’s where crypto comes in.
Loyalty reward programs are the ideal path to placing crypto in the public’s hand and assisting in mainstream adoption. Crypto currency and blockchain technology mend the shortcomings of current reward programs for both businesses and customers.
As It Is
At the moment, loyalty reward programs possess many downfalls for both businesses and consumers. A business’s bottom line can really be affected when issued points go unredeemed. Moreover, these programs can be costly and time consuming for companies to operate. Businesses have to factor in program initiation and introduction, as well as management and operation.
All that to provide a reward program that doesn’t actually engage current customers or excite new ones.
These programs can be more of an annoyance than an incentive. With expirations, redemption qualifications and unclear program guidelines customers are becoming reluctant to enroll in additional programs and less likely to participate in already enrolled in programs.
Crypto currency and blockchain based reward programs are coming to change all of this.
Customers
With the alarming amount of unredeemed loyalty points, it’s obvious that they are of little to no value for customers, otherwise they would be used left and right. Once a crypto currency token is earned, though, it is now an asset for customers, they own it. What does that mean? That means that customers choose how they want to use their tokens. They have the capability of using those tokens where they were earned or exchanging them and using them at other retailers.
Since a token is a form of currency, customers could hold their tokens and watch them grow in value or trade earned tokens for other crypto currencies in an exchange if they desired. Touching slightly on the topic, although there are arguments that cryptos are buoyant and volatile, risk is almost baseless seeing as these tokens aren’t paid for directly but rewarded instead.
On top of earning something of actual value, customer’s personal identifying information is more secure, affording greater privacy. Thanks to the decentralization blockchain technology provides, customer’s data is not stored centrally or all one in place.
Furthermore, like mentioned previously, earned tokens are owned tokens. With crypto currency tokens there are no expiration dates or fine print. There is no company to tell the customer when, where, or how tokens are to be spent.
Reward Tokens:
Provide more ways in which they can be redeemed
Hold an actual value
Have no expiration or redemption requirements
Businesses
With current programs being more of a burden to customers, brands are confronted with an obstacle when trying to obtain new customers this way, as well as engage current customers. A crypto based reward program provides a new, exciting and unique way to earn rewards setting apart brands as well as creating buzz around the modernized program.
On top of reducing customer acquisition costs, blockchain helps reduce operation costs with lower transaction fees. In addition, smart contracts allow businesses to spend less time and money on program management. Additionally, because tokens are owned by the customer once rewarded, they are no longer liabilities on company’s balance sheets. Crypto based reward programs positively affect a business’s bottom line.
Aside from cost reduction, blockchain technology preserves a brand’s image and reputation by better protecting user data. With greater security measures, data breaches are less likely to damage a brand.
Tokenized Programs:
Offer a unique and secure way to reward customers
Reduce many costs associated with reward programs
Provide greater data protection and security
Crypto is Coming
With multiple benefits and means of enhancing and revolutionizing current reward programs there is room for crypto based rewards. With loyalty programs dating back to the 18th century it’s time to take a more modern approach to this industry.
Check out iReward.io to get more information and updates in regards to when crypto based rewards will be available to the public.
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