In today’s digital world, customer loyalty programs have experienced a major evolution. These loyalty programs help businesses with customer retention and rewarding long-term customers, and technology plays a significant part in making them effective. These programs are also marketing strategies that encourage customers to patronize a business at discounted prices. They are pivotal for recurring business in today’s digital world. 

Rewards programs are more sophisticated now with steps taken to personalize them, make them engaging, and build long-term brand loyalty via these programs. Over the years, traditional loyalty programs have faced limitations that technological advancements are easing today. 

Some of these limitations include:

Lack of personalization by using generic rewards
Predictability and boredom to most loyalty programs
High qualification threshold for many of these programs
Lack of transparency and interoperability 

These limitations are being solved by technologies like the blockchain. Since it came onto the scene, blockchain technology has revolutionized many industries, niches, and sectors. And the customer loyalty and rewards niche is one where the blockchain is useful. Because of this, there’s a clear shift in customer engagement and rewards, and this is what we will be discussing in this article. 

State of Digital Rewards

The state of traditional digital reward systems used in customer retention has needed changing for a while now. These systems have been plagued by centralized control and inefficiencies in their operation. Many loyalty programs operate in proprietary silos where customer data are trapped, which prevents seamless interactions with other platforms. It is this operational crack that makes consumers — in an attempt to qualify for rewards — open and operate multiple accounts, and take on difficult redemption processes. The businesses themselves do not have it easy as a result of this. They struggle with limited visibility and understanding of customer behavior (which birthed the struggle for the customers too), which leads to higher operational costs. 

Blockchain and Web3 technology are changing this. Unlike what is obtainable with traditional systems, rewards on the blockchain offer a rather unprecedented level of transparency by allowing customers to verify their transactions and points on public ledgers. The introduction of smart contracts has also brought about the automation of many processes that were previously done manually. This has eliminated the issue associated with human error and reduced administrative running costs. 

Aside from all of the obvious impacts made by the blockchain on this sector, one profound impact has been the ability of the blockchain to create an interconnected rewards ecosystem. Projects like Affi Network and Inspir3 enable the earning and redemption of rewards across multiple platforms. Affi Network is a decentralized on-chain incentives platform that enables marketers to incentivize users for on-chain actions, such as voting, swapping, minting, staking, depositing, or playing. The latter, Inspir3 is a decentralized multi-brand lifestyle, loyalty & rewards application on the MultiversX network. On Inspir3, users can own personalized digital collectibles that they can use to redeem cashback, discounts, gated access, and other experiences.  

Loyalty Programs for the Future

Blockchain technology is transforming the loyalty programs management market and this is evident in the growth of the ecosystem. The market is projected to grow from $11.7 billion in 2023 to $41.2 billion by 2032 at a Compound Annual Growth Rate (CAGR) of 15.2%. Innovative platforms on the blockchain are challenging the status quo of unredeemed rewards that traditional programs have become accustomed to. This is because these blockchain platforms prioritize the creation of value and accessibility. A good example of a blockchain platform doing this is Rewardable. With Rewardable, you can make extra money by completing simple online tasks and micro-jobs. They connect you with paid opportunities from trusted brands and projects, giving you high-quality ways to earn. The platform has maintained a 4.8/5 user satisfaction score on Product Hunt in recent platform metrics and has an impressive redemption rate. 

Rewardable is proof that the future of loyalty programs lies in giving customers access and control over their rewards and ensuring that there is immediate creation of value. This is evident in Sparissimo’s approach to loyalty rewards. Sparissimo is a company dedicated to providing customers and businesses with a better online shopping experience. The company boasts a network of over 2,860 online shops, 300 restaurants, and a fast-growing base of 30,000 private users, there have been over 72 million sales at Sparissimo through its decentralized platform. The platform has a hybrid system where customers can earn real cashback in Swiss francs (CHF) which can be converted into SPAR tokens or transfered to the customer’s bank account. Customers who hold the SPAR tokens gain access to exclusive discounts and promotions. The SPAR token is to Sparissimo what Velocity Points are to Virgin Airlines. They can be used to purchase goods and services from selected stores, participate in Sparissimo’s sales, receive rewards from the Staking and SPAR programs, participate in community voting, and receive promotional power.   

The future of loyalty programs is on the blockchain, and platforms like Rewardable recognize this. It is why the company is connecting users with verified opportunities, maintaining a good task completion rate that has attracted partnerships with top brands looking for authentic user engagement. 

Challenges and Solutions

A significant barrier to the mainstream adoption of blockchain technology for customer rewards programs is the technical difficulty attached to the blockchain. According to Vineet Singh, senior product manager at VeChain, “This has been an issue with the Web3 space for some time, where the features and services have simply been inaccessible for the vast majority of potential users due to the complexity of the space. On the other hand, Web2 has had decades to fine-tune UX, adapting to new mediums like smartphones and tablets.” Reports suggest that about 70% of users abandon Web3 platforms due to the complex onboarding processes, and speaking to CoinTelegraph, Robert Hoogendoorn, the head of content at DappRadar, a blockchain analytics platform said two obstacles needed overcoming – a “simplified interface and user experience.”

The projects mentioned in this article are implementing layer-2 scaling solutions that improve transaction speeds and are using optimized smart contracts that reduce transaction costs. There are also wallet integration systems that are simplifying user experiences and bringing down the average time needed to onboard onto the blockchain space. These projects are easing Web2 to Web3 transitions by simplifying dashboards, automating compliance tools, and creating educational resources that are helping increase customer adoption rates. 

Conclusion

There is a clear shift in the creation and distribution of value in the digital economy. This is being facilitated by the ongoing blockchain revolution, especially in customer rewards and loyalty programs. The on-chain incentives of Affi Network, the innovative cashback system of Sparissimo, the Micro-task ecosystem created by Rewardable, and Inspir3’s disruptive multi-brand loyalty solution are creating a more user-focused, efficient, and transparent customer reward ecosystem. These innovations are carving a new landscape where rewards are valuable and programmable.

The post How the Blockchain is Revolutionizing Customer Loyalty Programs appeared first on CoinGape.

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Filed under: News - @ November 1, 2024 7:20 am