For years, businesses have used loyalty programs to incentivize customers to patronize their products or services. The traditional loyalty reward system usually entails customers accumulating points they can redeem for discounts or freebies. However, these systems are often centralized, meaning businesses have complete control over the points and how they are awarded. Unfortunately, this centralization often leads to complex reconciliation and high administration costs.
Enter the Blockchain Technology
Blockchain is reinventing the traditional loyalty rewards systems by helping businesses to build trust with their customers. By using this new technology, businesses can show their customers that they are committed to providing them with the best possible experience, which can go a long way in building long-term customer relationships.
Read on to understand how blockchain is transforming traditional loyalty rewards systems.
Why Blockchain?
It's no secret that blockchain technology is changing how we do business. From streamlining supply chains to simplifying international payments, blockchain is making it easier and more efficient for businesses to operate. Here's how blockchain is changing the loyalty rewards landscape.
1. Reduced Costs
Blockchain for loyalty programs can reduce costs. Businesses have to deal with the high costs of printing and distributing physical rewards and administrative costs associated with managing the program. With blockchain, businesses can issue digital tokens sent directly to customers' digital wallets. Blockchain eliminates the need for printing and shipping costs and reduces the amount of time and resources required to manage the program.
2. Boost Customer Engagement
Another issue plaguing traditional loyalty rewards programs is customer engagement. Customers frequently sign up for a loyalty program but have yet to use it. Blockchain-based loyalty programs can improve customer engagement by providing customers with a more user-friendly experience. For example, some blockchain-based loyalty programs allow customers to view their points balance in real time and redeem rewards with just a few clicks. This convenience factor can go a long way in increasing customer engagement and fostering loyalty.
3. Increased Transparency
One of the most significant issues with traditional loyalty programs is the need for more transparency. With so many intermediaries involved, it often takes a lot of work to track where your points come from and how they are used, thus leading to frustration on the part of consumers who feel like they need to get something in return for their loyalty.
Blockchain solves this problem by creating a decentralized ledger of all transactions. As a result, businesses can't tamper with the data, and consumers can see exactly where their points are coming from and how they're being used.
4. Improved Efficiency
Another challenge with traditional loyalty programs is inefficiency. With so many intermediaries involved, it can take weeks or even months for points to be redeemed or earned. Thus, it is frustrating for businesses and consumers who want to use their rewards as soon as possible.
Blockchain-based loyalty programs are more efficient thanks to smart contracts. Smart contracts are digital agreements that execute when certain conditions are met. For example, a smart contract could be set up to award points to customers when purchasing from a participating merchant, eliminating manual point tracking and making it easy to earn rewards in real-time.
5. Enhanced Security
Traditional loyalty programs are vulnerable to fraud due to the centralized nature of their data management systems. If hackers gain access to these systems, they could potentially steal millions of dollars worth of points or even manipulate the data to their benefit.
Blockchain provides enhanced security for loyalty programs by storing data in a decentralized ledger that is virtually impossible to hack. Additionally, blockchain makes it much more difficult for fraudsters to tamper with the data, thus making blockchain-based loyalty programs much more secure than their traditional counterparts.
Introducing Libra Incentix: The Future of Loyalty Reward Systems
Libra Incentix has created the LIX platform, which uses BEP20 standard LIXX tokens with solidity deployed on the Binance Smart chain. On top of replacing traditional loyalty points, LIX will enable small and large brands to build their own ecosystems with their own loyalty currencies that can be monetized and managed over blockchain.
The LIX platform simplifies partner onboarding, enhances the customer redemption experience, and automates cash conversion at the point of sale via partnerships with commerce and POS technology providers. Also, LIX allows transactions to be recorded and accessible in near real-time by numerous parties participating in the process, enabling the loyalty rewards program provider to credit points to consumer accounts more rapidly. Customers want easy and immediate access to their rewards; allowing them to do so quickly increases the likelihood of a great customer experience and, as a result, promotes business loyalty.
In this age of the internet, we are constantly inundated with choices, and when it comes to loyalty rewards programs, there are so many options that it can be hard to keep track of. That's where Libra Incentix comes in; reach out to us today and learn more about how blockchain will reshape loyalty rewards.