Distributed ledger technology, also known as blockchain, has received a great deal of attention in the last few months due to its capability of powering crypto-currencies such as Bitcoin.
The technology can also be used outside of the crypto space by entrepreneurs, organizations, governments, and technologists when it comes to digital voting records and the protection of formal and informal property holdings. Now, many are also looking into the technology’s ability to improve customer service, experience, and engagement.
A new research study that appeared in Analysis: Should Blockchain Power Your Customer Loyalty Program. The study, conducted by Kaleido Insights, found that there are over a dozen companies worldwide that intend to launch either a blockchain-based customer loyalty program or branded crypto token to promote customer engagement.
According to the study, blockchain technology offers a solution to many large customer loyalty programs due to the technology’s distributed and secure nature. The technology is able to address issues such as complexity, integration and alignment of large supply networks, calculation of balance sheets, and so much more. The study also found that due to these qualities, blockchain technology has a lot of potential concerning customer loyalty.
Here are three specific areas identified by the study that could help provide an improved customer experience:
Overarching Customer Loyalty Program
The average customer is a member of 14 different loyalty programs, and of those programs, the customer is only active in a handful. Most customers prefer programs that allow them to redeem points earned. Therefore, an overarching customer loyalty program that uses cryptocurrency and that is powered by blockchain technology, may work well for customers. The system should also feature a rewards system where customers can redeem rewards across brand.
Managing Complexity And Connecting Partners And Suppliers
A major drawback of many customer loyalty and reward programs is that hey are becoming more complex in an effect to be more compelling. This quality then makes them more difficult and expensive to manage. A blockchain-based solution may be an answer.
Kevin McMahon, executive director of mobile and emerging technologies at SRP states that blockchain solutions not only “improve the operation and execution of loyalty programs and reduce overhead costs,” but also “provide[s] an easier route to sharing data and loyalty program perks, without the hassle of having to strike individual agreements and integrations for each partnership.” Further, “some industries stand to gain more out of doing so than others” and “it is likely that the travel industry and possibly financial institutions or retailers will be among the first to adopt this technology at scale.”
Increased Data Protection And Security
Data breaches are another significant problem and they tend to lead to the theft of customer data. Customers are understandably dissatisfied with the lack of proper security mechanism. Eric Marks, a senior director at West Monroe Partners stated that “the implications of an unsecure rewards platform are growing” and that brands should be considering blockchain as a solution. It is important to note that implementing blockchain technology comes with some concerns, such as those that relate to the environment and the maturity of the technology to standards employed.
Overall, blockchain technology does offer a solution for the industry – but it is just a matter of implementation and addressing the issues that may stand in the way.