According to the IMM Journal of Strategic Marketing, traditional customer loyalty programmes are in trouble. Yet, according to a study by the Harvard Business School, increasing your customer retention by just 5% can have outsized benefits on profits of up to 95%.
That is why retailers, in recent years, have been focusing on loyalty reward programs to keep their customers coming back for more.
However, with the advent of online shopping, and particularly shopping on mobile devices, consumer retail behaviour has been changing dramatically.
Against a backdrop of increased mobile usage and internet giants now delivering products in record time upon a simple voice command, smaller retailers and their loyalty programs are clearly under strain.
Consolidated Platform for Liquidating Loyalty Rewards
One ICO thinks it has the answer. MobileBridge, a mobile-based marketing platform, says that “traditional loyalty programs repeatedly fail as consumers lack a sense of value or ownership.”
More specifically, points accumulate whilst consumers see no real value in exchanging them. According to MobileBridge, in North America alone “the cumulative value of unused ‘points’ is approximately $100 billion.”
Hoping to tap into this market, the team behind the project is conducting an ICO over the next few weeks, aiming to finance the creation of the Momentum Platform, a space where companies can “launch new, or convert existing programs into cryptocurrency-based marketing and rewards programs.”
The platform will be fuelled by the Momentum Token. The idea is that, rather than receive non-fungible loyalty points, customers will be rewarded with something that carries transferable value, the Momentum platform’s very own cryptocurrency. This token will then be redeemable for fiat or other cryptocurrency through exchanges.
Fungibility – or ease of conversion into another asset – is key. Erik Venter, CEO of South African airline Comair, says that ” … flyers are no longer interested in earning only air miles,” so airlines “must also be able to reward them through partnerships with the likes of retailers, car hire firms and hotels.”
In other words, instead of offering partnerships, which are by definition limited, you could reward your customers’ loyalty in cryptocurrency, which essentially becomes a much more versatile – and therefore more valuable – asset in the minds of consumers.
The challenge for players like MobileBridge, however, will be to ensure that retailers – and their customers – perceive value in having their loyalty program managed by a third-party.
Last week, budget Asian airline AirAsia hinted that it was considering migrating its own loyalty rewards program to a blockchain-based token model, suggesting that a battle of blockchain-inspired business models may have just commenced for dominance of the loyalty rewards space.
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