Examining the relationship between blockchain and loyalty rewards programs
If you want to keep customers loyal, you have to reward them. That’s true in every industry, from gambling to retail.
Blockchain technology is now being applied to loyalty schemes, and this has the potential to change and improve the relationship between businesses and their customers across the board.
The fundamental
The basis for is clearly complicated, but the overarching ideas at play are less so. It is essentially a means of sharing and verifying data in a decentralized manner, meaning that no one individual controls anything, and everyone is responsible for maintaining and sustaining this ecosystem.
This can be useful in many contexts, outside of trading crypto assets. For example, the blockchain is denoted as , and that is only the tip of the iceberg in terms of potential uses going forward.
The loyalty angle
For online casinos, maintaining customer loyalty has typically involved incentives such as , as well as benefits based on their betting habits on a given site.
The problem with this is that this is not a particularly portable solution. Each site has loyalty rewards programs that are effectively silos, and so players can’t expect to reap the benefits elsewhere.
Self cannot reasonably offer rewards and incentives that transfer to other contexts, without having to establish partnerships with third parties and create complex infrastructures to support this, at great cost to themselves.
Blockchain aims to overcome this by allowing loyalty initiatives to be decentralized, meaning points can be accumulated, stored and redeemed with ease, and with significantly lower costs involved.
The additional consumer control
It’s not just businesses that can benefit from blockchain-backed loyalty schemes. The customers themselves will enjoy the control that this creates for them.
For example, being able to buy cryptocurrency and combine those tokens with points and rewards earned elsewhere online, while having your assets stored indelibly and immutably on a public infrastructure, will give average users peace of mind.
It is no longer necessary to trust companies to handle all your data. With the blockchain underpinning rewards programs, your points are safe and your other assets can be held with them.
The speed and efficiency
Computer systems operated by a single entity can be slow, meaning that the processing of loyalty rewards is rarely instantaneous, and can even take hours or days to complete.
The blockchain once again sets things up in this context, providing super-fast allocation of earned points, while making them a breeze to redeem when the time is right.
The consideration of cost
There are various costs associated with running a loyalty program. It is not only about keeping the service up and running, but also about having to pay to detect and prevent any fraud that is also carried out by customers.
Transferring this to the blockchain and leveraging the security and consistency this provides means businesses can minimize the costs of operating such a scheme. This in turn means that more organizations will be able to justify doing so from a financial perspective, putting them on a more level playing field when it comes to customer retention.
The bottom line
Even this brief overview of the connection between blockchain technology and loyalty rewards programs is enough to reveal that there is the potential for seismic change in this arena, with both customers and companies in a position to reap the benefits.
