The loyalty programs on Blockchain

Customer loyalty today is considered priceless for companies to reach their desired goals. It will cost the company 5 times more to find new customers than to maintain the ones they already have. In today’s business world, fueled by competition, it is crucial to maintain the existent costumers of a company, for this reason, loyalty programs were created. However, when we speak about traditional loyalty programs, companies, and their customers, have identified many challenges such as being unable to identify where the loyal behavior happens and others. Another, perhaps better, way for companies to maintain the loyalty of their customers is through approaching technology, specifically speaking; Blockchain. In this article, we will discuss the reasons that make blockchain perfect for the rewards industry. Here are the best benefits of Blockchain technology:

-Open systems

One of the main worries of customers when it comes to loyalty programs, is the expiry dates of their points, of the deadline before which they must redeem their rewards. In the blockchain world, transparency rules. This makes it impossible for loyalty program rewards or tokens to be canceled or to expire because everything is recorded and transparent to the public. Transparency is important to maintain trust with customers who do not have to worry about their rewards anymore. Open systems encourage the engagements of consumers in the offered loyalty programs, thus triggering more spending.

-Less clutter

Traditional loyalty programs are very common in our society, therefore it is not surprising that every individual can be part of many loyalty programs from airline miles, to supermarket points and others. When all companies start using Blockchain’s loyalty programs, their users will be able to accumulate all these points in one place and redeem them from any company they are customers of. Blockchain will allow them to use a single wallet where their points will be accumulating.

-Reduce fraud

A breach in the company’s loyalty program or the store can lead to many complications for the customers. For Blockchain, this type of breach won’t be common due to the security that this technology offers. Blockchain generates a time-stamped distributed and immutable database, helping prevent problems of transaction manipulation and fraud.

-Reduced costs

Maintaining and implementing loyalty programs is very costly for companies, which is a challenge with high costs. Blockchain on the other hand requires fewer amounts of money. The cost is lower on three different levels which are customer acquisition, system management and transactional level. Even though Blockchain requires upfront costs it has long-term benefits that reduce costs related to fraud and errors, as well as management costs, helping save more money.

-More flexibility

Flexible loyalty programs allow more engagement as customers prefer not to wait for a long time to get their rewards or to have their points redeemed. Blockchain has the features to fix this issue and transactions are recorded and can be accessed by the different involved parties. This will allow the customers to track their rewards and redeem them.