Loyalty programs have stood the test of time despite technology disrupting the way consumers interact with brands, forever changing the way products and services are rendered.
For the same reason, many methods of incentivising customer loyalty have come and gone over the years, however, the concept of rewarding customers will never go out of fashion. Brands have recognised the need to cultivate loyal customers in an environment with increasing business competition and decreasing customer loyalty.
The entrance of cryptocurrencies and their blockchains have opened up an opportunity for brand building through tokenization. By tapping into these technologies, loyalty programs can improve customer experience while addressing the challenges associated to traditional reward models.
The current situation with loyalty programs is that there are simply too many across different brands for customers to accumulate points quickly enough to redeem a substantial reward of their choice. As these programs operate in silos, they inevitably result in inconsistencies in the user experience and, at times, delayed access to reward points.
A poorly executed rewards system ultimately runs counterproductive to its primary purpose of customer retention, turning into a cost center for customer service.
We envisage the introduction of a system on the Tokenomy Platform in which reward points of different issuers may be readily interchangeable through a network of participating companies, merchants, and startups. All of which will offer a variety of different rewards.
Since reward points are built on tokens, they are essentially currencies used in day-to-day exchange for products and services. This flexibility enhances the utility of reward points by empowering customers with the choice to tailor their rewards according to personal tastes and preferences — be it through the purchase, sale or swap of tokens with the greater exchange community.
The decentralized and open-source attributes of blockchain technology along with high security encryption, will enable businesses in the ecosystem to connect directly with customers in an open fashion. This facilitates unmediated interaction among stakeholders from customers to participating merchants in a safe and tamper-proof environment.