Is Blockchain Technology the Future of Merchant Loyalty Rewards Programs?
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Merchant loyalty programs is nothing new and, given the constantly increasing number of such programs, one can rightfully assume that they are particularly appealing to consumers. However, is it a win-win for both parties indeed? The plain truth will probably hurt the majority of merchants implementing loyalty programs to help boost their sales, satisfy their existing customers, and attract more prospects.
Recent data shows that loyalty program signups have gone up by more than 25% from 2015 to 2017. Unfortunately, less than 50% of consumers actually use those programs. The main reason behind this oxymoron? It takes forever for consumers to gain enough spending power, which is a major turn off for them in the long run. So, even though they enthusiastically register for a merchant loyalty program, they soon realise it takes way too much effort and spending to ever have any benefit from what they signed up for.
It becomes apparent that merchants are missing out on a huge opportunity for more sales from failing loyalty programs. Plus, they are being deprived of the chance to target customers with customised offerings, considering that effective merchant loyalty programs also provide valuable customer data that a merchant can use to compliment their customer retention strategy. Right now, we can say that we are in a critical phase, where both consumers and merchants are dissatisfied with what they have in their hands.
The Pain Points in Today’s Loyalty Programs:
- Unused loyalty points translate into a significant liability for the merchant.
- Companies miss out on opportunities for increased sales and the creation of a customer-centric retention strategies as customers don’t return to spend their loyalty points.
- Consumers are overwhelmed by a large number of loyalty points programs and the numerous cards they are provided with.
- Consumers don’t see any remarkable benefits from loyalty program memberships as they can’t cash in. As a result, they lose interest in using the programs they signed up for.
What Needs to Change so Loyalty Programs Work?
In short, the key to turning things around for both merchants and consumers alike is to be able to provide a better loyalty points ecosystem that will allow/encourage consumers to use the loyalty programs they register for. At the same time, it is crucial to ensure that merchants are relieved of liability.
Cryptocurrency Using Blockchain Technology: The Next Page in Loyalty Programs
Forward-thinking experts strongly believe that a universal loyalty currency which can be used across all industries, from e-commerce and banking to travel and hospitality, will deliver the much-needed change in the current landscape, especially if built using blockchain technology.
Such a currency will decidedly solve many problems given that it will save consumers from the headache to have a pack full of loyalty points cards they don’t use. Instead, they will hold a single loyalty currency that will be accepted by a wide range or merchants. All they (consumers) will have to do is simply decide where they want to spend their loyalty points on.
Considering the fact that using a universally accepted loyalty currency will deliver faster and centralised rewards, consumers will be much more motivated to spend more than ever before. This also means that merchants using a single loyalty currency can expect improved customer satisfaction too. Not to mention the incredible freedom such a currency provides (you can spend your money as you wish and get to choose how you collect the rewards of your transactions). That way, both parties are content with the outcome of their transaction(s) with one another. This is where Elements comes into play, promising to bring greater value to the whole experience and provide solutions to the fragmented loyalty rewards industry.
Elements is a new cryptocurrency with increasing recognition and acceptance, mainly due to its unique and pioneering features. With Elements, customers are allowed to use any e-wallet they wish to participate in different loyalty programs and store their points in a single wallet. That way, they can build the value of their “Element” loyalty coins without the need to shop more. That aside, they can use their earned loyalty points to purchase products from merchants or choose to exchange them for other currencies, flat (i.e. USD, Euros, etc.) or cryptocurrencies (i.e. Bitcoin). As for merchants, mining the currency provides them with free coins, which, in turns, reduces the cost of liability dramatically.
- Elements doesn’t store the customer’s personal data. This ensures that both the merchant’s and customer’s privacy remain intact.
- Elements is built on its own blockchain that uses X11 Algo (Digishield)and generates blocks by PoW (Proof of Work) technology.
- The blockchain also records all transactions (which are processed within 30 secs), preventing customers from performing scams to counterfeit their loyalty points.
- Elements allows merchants to mine Elements; thus, reducing their liability.
- Elements gives consumers the freedom to use their loyalty points as they wish and choose the wallet that best serves their needs (Windows, Windows Light, OS X, OS X Light, Android, IoS or GitHub).
- The unit price is expected to increase due to the finite supply of Elements tokens.
- Given the rapidly expanding popularity of Elements, the purchasing power of the coin will only increase.
Apart from everything else, the low transaction fees and the generous mining rewards* also make Elements a strong competitor.
* miners get 50 EMLs – Elements token – as a block reward. The tokens can be mined from the mining pool for free or the block explorer available on TheElements.io. Being able to create your own ELM tokens is definitely a huge plus.
Will Elements manage to function as the go-to loyalty points program between a wide array of merchants shortly? Considering its rising popularity and the interesting (even revolutionary) attributes it brings to the table, it certainly has quite a lot of potential to make the difference. But, so are other cryptocurrencies out there. Guess, we will have to wait and see who will be the crowned winner of this battle.