Frequent flyer programs have popularised loyalty programs worldwide and specifically the “currency of collection” - points.
Not only the domain of airlines, points are also often used within loyalty program structures by credit cards, hotels, retailers and other categories of business as a mechanism to allocate value to buying behaviors – I transact, I earn points and I redeem them for a reward.
Billions of points are earned and redeemed every day in the transaction economy and “I paid that with points” is part of mainstream conversation.
The cryptocurrency conversation and consequently blockchain technology talk is also now becoming more mainstream (thanks to Bitcoin and friends).
So what’s the connection with points loyalty programs, blockchain and cryptocurrency and where’s the opportunity?
I’ve been watching this space with intense curiosity, seeking to understand what it all means and found a number of interesting articles on loyalty programs and cryptocurrency as well a couple of examples of brands on that journey.
This has started to help me get a grip on this fascinating, fast evolving and new(ish) area, so I thought I would share some of what I have found, giving you a hint of what’s out there.
You can read more detail (click through) on each if you have the interest or desire to learn more:
1. HBR article March 2017: Blockchain will transform customer loyalty programs – March 2017
This HBR article goes into the detail of how blockchain works (the 5 basic principles) and then explains why loyalty programs and specifically, the travel industry loyalty programs are “vulnerable to the blockchain revolution”.
2. CMO article – Jan 2018: How cryptocurrency is set to change the customer loyalty program model
The CMO article is based on the results from a rewards program trial at the University of NSW, where “students and staff could earn cryptocurrency instead of points in return for day-day purchases with merchants across the campus”.
3. Fortune – Jan 2018: Why hooters is getting a boost thanks to bitcoin and blockchain
The article highlights Hooters Restaurants’ investor Chanticleer announcing plans to offer customers digital currency in return for eating at their restaurants - “Eating a burger is now a way to mine for cryptocoins! Every meal enjoyed at any Chanticleer Holdings brand will accrue currency for the consumer that can be used for future meals or traded with other consumers.”
The eatery at Oxley Tower on Robinson Road accepts bitcoin and its very own Ducatus coin, but CEO Ronny Tome says there are plans to accept other cryptocurrencies soon
"The idea of the café was developed because we wanted to make sure that people can use our Ducatus coins but also bitcoins and other cryptocurrencies in day-to-day business. "Right now, cryptocurrencies are mostly used for speculation on markets … We want to make it part of our daily life," he said
Besides the insights on the impact on loyalty programs and some examples of brands starting that journey, here is another case in point on how cryptocurrency is being used as the reward mechanism in a total customer interaction eco-system.
“We’ve built the world’s first cryptocurrency-based shopper marketing and loyalty system. Shping Coin will enable brands, retailers and certification bodies to reward consumers directly for their attention and engagement with product marketing and messaging at the critical point of purchase.”
A little more background on Shping
(Note: With full disclosure to readers, the author is an advisory member of the Shping team).
Shping is an all-round brand protection, marketing and consumer engagement platform. It is fuelled by product information supplied by brands, retailers, government institutions, certification agencies, customs, product recall portals and GS1 from Shping's Global Product Database - growing to become the largest of its kind in the world.
Consumers can access the database by scanning product barcodes through the Shping App, giving them up-to-date information about products they are thinking of buying before they proceed to checkout.
To further encourage adoption, Shping is now introducing an innovative cryptocurrency-based reward system to the platform allowing brands and participating parties to reward consumers directly with Shping Coin.
Shping Coin is a decentralised cryptocurrency that fuels the growth and adoption of the Shping Platform amongst shoppers and has just been released (22 January 2018) in a public Token Sale offering brands, businesses and other enthusiasts the opportunity to acquire the reward tokens.
Consumers can also earn Shping Coins based on various interactions with the Shping platform - scanning products, looking up ingredients, contributing details to the product database, rating products for the benefit of other users, providing reviews and others opportunities to earn their Shping coins.
A classic tiered rewards program structure is available to Shping users with a multiplier impact on Shping coins earned as more of these interactions are made and progress through the tiers achieved. Status upgrades are also available when criteria of interaction are achieved.
Brands, retailers, certification bodies and other authorised agents can use Shping Coins to incentivise and reward consumers in retail shopping situations to influence purchase decisions, validate product authenticity and drive customer engagement and loyalty.
In summary, as the minutes go by, the changes due to cryptocurrency and blockchain on loyalty programs directly (points structures) and indirectly where product/service offerings have a consumer reward mechanisms with cryptocurrency, are becoming more evident.
For the massive mainstream points programs it will still take time to adapt/evolve or become part of the good (sad) old days…”remember when you could earn points from your airline/hotel/retailer………(fill in the blanks).
Have a happy loyalty points day!