For a number of years, businesses that interact with customers have found success with loyalty programmes. The average American family participates in 29 different loyalty programmes, according to the 2015 Colloquy Loyalty Census. For programme partners, redeeming and exchanging these loyalty points is a difficult and time-consuming task. To attain high redemption rates and make payback points easily redeemable, better mechanisms than those provided by legacy systems are necessary.
Companies may optimize their loyalty programmes and increase their efficacy by integrating blockchain technology. An organization’s customer loyalty programmes may benefit from the blockchain loyalty program in terms of increased brand loyalty, lower expenses, and increased efficiency.
Network loyalty programme administration technical issues are also resolved by blockchain technology. It allows the ledger of transactions to be shared amongst members of a network. A unique token created by an algorithm is assigned to each new online transaction that is started. Tokens work together to form blocks, which are then sent around the networks to quickly update every ledger. To produce a safe, reliable, and validated record of every transaction, newly verified transactional blocks are linked and connected with previously verified blocks. Without sacrificing secrecy or competition, it creates interaction and intersection between administrators, users, and system managers. Blockchain technology lowers investment costs and offers stronger security, more traceability, increased efficiency, and better transparency.
Principal Advantages of Loyalty Reward Programs
Effective loyalty programmes draw in new members and keep existing ones coming back, which boosts revenue. The goal of the reward programmes is to increase sales and improve customer experience. Adding blockchain technology to payback programmes can improve client satisfaction. Let’s investigate how:
1. Cutting Expenses
Blockchain technology reduces transactional, customer acquisition, and administrative costs. It lowers system management costs by making programme administration and execution simpler. Smart contracts built on the blockchain decrease expenses related to errors and frauds by making transactions visible, traceable, and secure.
2. Provides An Extremely Secure Setting
Every transaction on the blockchain results in extremely safe, time-stamped, and unchangeable database entries. The transactions guard against fraud, double entry, abuse, and other manipulations because they are immediately traceable and irrevocable.
3. Establishing A Frictionless Framework
Customers can generate reward points in the same digital wallet that they use to make transactions. Blockchain technology can make it possible for loyalty reward providers to control who can use their points and how, thereby streamlining the programme.
4. Generating Distinctive Business Prospects
Big loyalty reward companies might give opportunities to other firms and value-added services when they’re building an interconnected loyalty network.
In Summary
Loyalty programmes built on blockchain technology can boost customer confidence and present firms with novel prospects. Loyalty programmes will benefit from increased transparency and safe and secure transactions through the use of blockchain. Parties involved can more readily retrieve recorded transactions, which enhances their ability to better coordinate and expedite the redemption of credit points.Â
