Did you know that 40% of a store’s revenue comes from repeat business? That’s what some surveys suggest, and since both younger and older demographics tend to buy from their favorite brand, it’s time to realize the value of loyalty programs.
But as much as companies are trying to get buyers excited about reward points and other loyalty incentives, customers aren’t feeling it. In fact, in recent years customers don’t seem to know or care what their tier status is, according to Business Wire.
That’s why smarter companies are thinking outside the box – and off the grid so to speak, speaking of blockchain. High-profile companies are now offering cryptocurrency reward programs in hopes of improving brand retention – and for once, younger customers are engaged.
Not only do millennials own more crypto than any other generation, but they’re sort of counting on it to fund their retirement!
The Evolution of Value
Blockchain benefits might involve giving customers gifts in bitcoin or other cryptocurrency tokens.
Some companies that have already been experimenting with crypto rewards programs include:
- BlockFi
- Gemini
- Shake Shack
- Northern Pacific Airlines
- Bank of New York Mellon Corp
- Singapore Airlines
- Chanticleer Holdings
- American Express
- Boxed
When someone receives a loyalty “token” they can expect interoperable currency and one that’s gaining more legitimacy with every passing month. Starbucks and Whole Foods are now accepting crypto trade.
Some companies even offer a few extra incentives, countering well-known criticisms of cryptocurrency. Worried about the value dropping? Northern Pacific Airlines guarantees the value of their tokens will never drop below 2 cents per coin.
For more on understanding cryptocurrency, what it is, and what it’s not, read about some common crypto misconceptions.
Why It’s Hard to Turn Down Blockchain Benefits
Blockchain benefits are more anonymous compared to traditional loyalty programs. While it’s true blockchain transactions could be investigated, it’s far more difficult to look into a person’s crypto history than to deal with a bank or credit card company.
Financial institutions know everything about you, including your spending habits. Blockchain gives you back a measure of privacy.
Traditional loyalty points usually don’t have a real cash value, especially one you can track or convert to other funds. Crypto tokens offer some similarities to fiat. In fact, cryptocurrency can fluctuate with the market, unlike loyalty points – and can soar too, regardless of how the company is doing in terms of profitability.
Crypto tokens also wouldn’t “expire” – they could even be a long-term investment, rather than just a loyalty benefit. Here you can see some financial companies like SoFi are beginning to advertise crypto loyalty programs with their credit cards.
Blockchain loyalty is changing the game because younger customers are curious about it and see it as an advantage when signing up with a new credit card. Whether fluctuating or not, the value of crypto is steady. It’s becoming part of the new fintech and the new Web3 internet.
Future Challenges Ahead for Blockchain Loyalty
Blockchain is not exactly the new kid on the block, pun intended, when it comes to business. Cryptocurrency is so popular among the younger generation that most mainstream companies are considering HOW to cash in on the trend and when, rather than IF.
Of course, major credit card companies and banks have to be careful about how they might institute blockchain loyalty programs. Many companies are still considering how to incorporate blockchain benefits easily and even automatically, as well as reduce their own costs in creating these programs.
Motivating Customers to Cash in Their Rewards
About 30% of Americans never redeem any loyalty points, and over 30% of millennials actually dislike rewards programs because of the obligation to carry extra cards.
The apathy about collecting rewards is what’s scaring companies into reconsidering their strategy. Programs that are manufactured to benefit the company – but not actually reward the customer to any real extent – are plummeting in popularity.
If the reward or loyalty points are lame, then the only motivation for activating them is not to lose them. But losing something of minimal value is no real incentive.
That’s why blockchain is set to change the way financial institutions retain their customers. Blockchain has investment value. Even if it’s not comparable to fiat currency, the opportunity for a person to increase their wealth with minimal effort is an opportunity worth exploring.
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Founder Dinis Guarda
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