Using Blockchain to Improve Customer Loyalty Programs

Posted By : Khushboo Arora | 09-Mar-2021

How Blockchain will Influence Loyalty Programs

Loyalty programs have been popular with customer-facing businesses for several years. According to the 2015 Colloquy Loyalty Census, it was found that the average American family engages in 29 different loyalty programs. Redeeming and exchanging of these loyalty points however is a cumbersome and challenging activity for program partners. Better mechanisms than the ones offered by legacy systems are essential to make payback points easily redeemable and achieve high redemption rates.


Businesses can implement blockchain technology in their loyalty programs to make them more effective and reap maximum benefits. Integrating blockchain technology with an organization’s customer loyalty programs has the potential to enhance brand loyalty, reduce costs and gain efficiencies.


Blockchain technology also addresses technical challenges for running network loyalty programs. It makes it possible to share the ledger of transactions across a network of participants. When a new online transaction is initiated, a special algorithm-generated token is allocated to that transaction. Tokens collaborate into blocks and shared across the networks, revising every ledger instantly. New transactional blocks are verified and connected with older blocks to create a secure, strong and validated note of all transactions. It establishes interaction and intersection between administrators, customers, and system managers without compromising confidentiality and competitiveness.

                                 Blockchain Based Loyalty Programs

Blockchain technology provides greater transparency, enhanced traceability, robust security, and improved efficiency while reducing investment costs. Oodles blockchain app developers have experience in developing cross-industry solutions to integrate blockchain technology with customer loyalty programs. We overcome challenges associated with data transparency and fraud to strengthen customer trust.


Key Benefits of Loyalty Reward Programs


Well-executed loyalty programs attract and retain customers to increase profitability. The reward programs aim to enhance customer experience and generate sales. Implementing blockchain to the payback programs can enhance customer satisfaction. Let's explore how:

   1. Reducing costs

Blockchain technology saves costs associated with transactions, customer acquisition, and management. It simplifies executions and administration of programs, resulting in reduced system management cost. Blockchain-based smart contracts make transactions transparent, traceable and secure to eliminate costs associated with frauds and errors.


2. Offers Highly Secure Environment

Blockchain creates highly secure, time-stamped and immutable database entry of every transaction. The transactions are easily traceable and irreversible and prevent fraud, double entries, abuse and other manipulations. 


3. Creating a Frictionless System

Reward points earned by customers can be generated in the same digital wallet used by them for transactions. Blockchain technology can enable loyalty reward providers to decide how and with whom the points are used, making the program practically frictionless.


              Typical Customer Journey in Blockchain World


4. Creating Unique Business Opportunities

At the time of establishing an interlinked loyalty network, large loyalty reward providers can offer value-added services and provide opportunities to other businesses.  



Blockchain-based loyalty programs can open up unique opportunities for businesses and strengthen consumer trust. Implementing blockchain to loyalty programs will bring more transparency and ensure safe and secure transactions. Recorded transactions can be accessed easily by involved parties, improving their capacity to coordinate better and redeem credit points faster. 


Are you planning to implement blockchain to your customer loyalty program?  We are an India based smart contract development company that develops solutions using Stellar, Ethereum, NEM and other blockchain technologies. Hire our blockchain app developers to be more competitive. Our smart contract solutions facilitate coordination between different departments and businesses to meet several organizational challenges. Contact us today for more details!  


About Author

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Khushboo Arora

Khushboo is a Technology enthusiast. As a content strategist , she has a great affinity for discovering and sharing unique insights and resources with the tech community.

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