Challenges of loyalty programs
Lack of customer incentives
Often, reward programs benefit only organizers, while customers have to purchase things they don’t need to get points; for that reason, 33% of millennials dislike reward programs, tells Hackernoon.
Low redemption rates
With a multitude of loyalty programs, 30% of Americans don’t redeem earned points in some of them up until they expire, so brands fail to get repeat business from that clientele.
Security breaches
Harris Poll reports that 71% of U.S. consumers are less likely to join loyalty programs that collect their personal data, worrying about their corruption and theft possibilities.
High maintenance costs
Loyalty programs cost a pretty penny for companies; costs might include third-party or proprietary software integration and maintenance expenses of $2K-$15K a month on average (as found by Stamp Me).
Personalization concerns
The demand for exclusive offers grows, but brands often fail to meet it for lack of proper tracking tools; as a result, their “one-size-fits-all” offers don’t bring them anticipated profits.
Dispersed infrastructure
Customers who participate in several loyalty programs at once might not reach the threshold in any of these to spend points, so they can’t use the services they spend a lot on in total.
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Get expert adviceBlockchain solutions for loyalty programs from Aetsoft
Flexible reward points
Offer blockchain-enabled tokens as rewards and let customers choose how and to what extent to redeem these.
Irrevocable assets
Provide irrevocable blockchain tokens as reward points; companies can’t take away those for some internal policy issues, so points can’t expire or get devalued.
Secure systems
Improve the security of your reward platform through blockchain’s cryptography encryption protected against hacker attacks.
Personalized offers
Arrange highly-targeted loyalty programs based on blockchain’s immutable records of customer identity and behavior.
Exchangeable rewards
Allow customers to transfer points between reward programs quickly by providing a single, cryptographically-secure, and easily exchangeable blockchain currency as points.
Self-maintainable programs
Cut program maintenance costs with self-enforcing blockchain technology that maintains loyalty records autonomously, without any supervision from your part.
Blockchain applications in loyalty programs
Use case 1. Simple program management
Currently
With a multitude of loyalty programs, each having an individual token as loyalty points, it becomes hard for companies to track transactions in different currencies across those.
With blockchain
Provide a single, encrypted and secure, token for all programs to seamlessly track its usage across multiple programs and allow customers to flexibly use it when switching between programs.
Use case 2. Secure transactions
Currently
Traditional transactions within loyalty programs are slow and highly insecure; as a result, millennials are most unwilling to join those for transaction fraud and even fund theft concerns.
With blockchain
Ensure fast and safe program-to-customer rewards, with smart contracts initiating payments, instant and self-inclusive, and low chances of fraud due to provided cryptographic encryption.
Use case 3. Improved data visibility
Currently
33% of millennials dislike loyalty programs for the pile of related cards to carry; for companies, in turn, tracking all data from multiple programs with different tokens, dispersed across fragmented databases, becomes quite a challenge.
With blockchain
Store data, like point usage and customer behavior, from all your loyalty programs in a single, blockchain ledger; distributed among trusted users, it is protected against tampering.
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