We can see various loyalty programs across economic sectors such as travel, retail, and financial services. However, one of the issues that most marketers face is if it enhances behavioural loyalty.
Members of the loyalty program may have a much greater share of wallet at the organisation with the loyalty program than non-members have. But, this does not inherently mean that loyalty programmes are effective. To benefit from the program, loyal customers can select themselves to become members.
Loyal customers spend more as they generate 40 per cent of a store’s revenue. It is also worth to note that millennial shoppers and larger population (62 per cent and 54 per cent respectively) tend to only buy from their preferred brand.
It is expected that brands spend more to attract customers as they are considered a hot commodity. For any kind of disruptive breakthrough, loyalty programs are set that would make them easy to use.
Hence it is possible blockchain technology is just the way – the technology behind bitcoin, which allows a database of transactions to be exchanged through a participant network.
The technology will enhance customers’ experience during the application process and prevent customers from filling their wallets with reward cards or creating different passwords for different reward accounts. They will not have to search for the options, restrictions, and redemption rules of each program with only one “wallet” for points.
All loyalty programs are vulnerable to a blockchain revolution, but the travel industry may be the most at risk. Travel loyalty schemes tend to be complicated and multi-currency, making them distinct from retailers that usually run straightforward discount programmes or banks that give cash back or a single currency that can be efficiently invested through various retailers.
Blockchain technology for loyalty programs is still somewhat in its infancy, but as more brands explore the capabilities, it may cause more significant disruption in the industry.
If more and larger businesses consider updating their conventional loyalty schemes or creating new ones through blockchain, it will be illuminating to see how this emerging technology scales.
