How Businesses Can Use Blockchain to Boost Revenue?
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Blockchain, cryptocurrency, bitcoin are the terms grossly misinterpreted, and seen as some kind of a fad. This is not without reason though, especially after the value of Bitcoin reached the $20,000 mark by the end of 2017, triggering anticipation, uncertainty and conjecture. However, experts in the domain feel the worth of bitcoin is the least interesting part, in the whole game. It is the underlying technology, i.e. which is the blockchain technology, that is going to disrupt industries and make them more efficient.
Blockchain, the core technology at the heart of bitcoin and other coin offerings, is a public, electronic ledger. The most common implementation of blockchain is the decentralized payment mechanism (i.e. cryptocurrency) between two unrelated parties. Cryptocurrencies have gained notoriety recently mainly due to bitcoin's meteoric rise and subsequent volatility. However, the real value of blockchain arises from its ability to capture any kind of electronic transaction between unrelated parties with low-cost enforcement, its distributed nature which makes transactions failsafe, and its immutability of record
Frictionless Transactions Soon to Be a Reality
Recent news on cryptocurrencies has been negative including proposals to ban trading in Korea and China, countries closely associated with their rise. This is to be expected in the early stages of the evolution of a fundamental building block technology that can touch nearly every transaction on the internet. In parallel though, banks ranging from the Federal Reserve in the US to the Bank of England, and the Bank of China, are considering issuing their own cryptocurrency. A network of 30 major global banks has explored using cryptocurrencies for interbank payments.
Analysts argue about blockchain's possible applications, but there is a sheer dearth of discourse on how this technology can make businesses increase revenue, acquire more customers or boost the bottom line. Entrepreneur India got in touch with experts and players in the field to assess the potential of blockchain in boosting revenue for businesses.
Abhijit Sarkar, Vice President M N Dastur, stated that blockchain can be successfully used to implement nearly any kind of contract - taxes, mortgage payments and even bets between friends. "However, the biggest promise of blockchain for consumers might be the near elimination of high-cost payment intermediaries in the western world. We know how networks like Mastercard, Visa and PayPal, routinely charge between 1-3% of every transaction in the name of convenience. When and if frictionless unrelated-party transactions become a reality, one will wonder why this massive, half a trillion dollar market capitalization industry today, ever needed to exist," he explained.
Resolving Billing Conflicts in the Logistics Industry
In India, the buzz around blockchain is gathering steam and many players in diverse sectors of industry are using it to boost revenue. According to Varun Biyani, Co-Founder and CTO
TruckHall, in an industry like logistics, there is a lot of repetition of the same information by various stakeholders involved in a transaction. Blockchain, he anticipates, will definitely improve efficiency and transparency in such an industry wherein a shared ledger would be accessed by key stakeholders and thus lead to faster movement and delivery of goods.
"For instance, a lot of time at the loading/unloading site the vehicle is detained due to lack of paperwork or completion of billing formalities as it is dependent on some external factor, such delays can be reduced by blockchain. Blockchain will also enable building smart contracts which will again resolve a lot of billing/accounting conflicts in the logistics industry," elaborated Biyani.
An Important Technology Driver
Aslam Khan, Founder and CEO, Octaware technologies Pvt Ltd. is also working on increasing revenue with blockchain in 2018-19. Octaware offers enterprise solutions and services to customers in finance, healthcare and government sectors. According to Kahn, blockchain has been an important technology driver in these three verticals. "Building in-house blockchain technology capacity and offering it as services is one of the strategies Octaware is working on," he shared.
Interestingly, Octaware has already started enabling its healthcare product, Hospice - Hospital Information Management system which is Azure cloud-enabled with Blockchain. "The EMR (Historical medical data in distribute environment) and TPA insurance management (Smart contract) features are also being integrated with blockchain technology," notified Khan.
Khan further feels the software product industry needs more computing power (PCs) for automated testing of the software products and should invest in long term/short term hard-wares. "The availability of a number of home user-PCs/office-PCs in the night time when they remain unused can open a new vista of opportunity. Using the blockchain distributed, smart contract and secured way of renting the unused computing power is the way forward. It's much like Airbnb for spare computing power available with home or corporate users," he enthused.
Boosting Ailing Customer Loyalty Programs
A loyal customer spends 67 percent more than a new one, found a survey by Thanx after analyzing 50 million transactions. It takes 5-7 times more money to acquire a new customer than to drive an additional visit from an existing customer, reports the same survey. While brands know the importance of customer loyalty programs, it is an ailing sector. This is because of a lack of a uniform customer loyalty program, high transaction costs and security concerns.
Imagine if the customer loyalty points you earn can be immediately redeemed into digital tokens that can be encashed in the form of cryptocurrency. For instance, say the rewards earned at a cookie store can be used to earn air miles. These rewards can either be used for investment or as a mode of payment.
For a brand, creating, implementing and tracking a customer loyalty program is expensive. Today there are platforms like Retainly, using which any brand irrespective of its size can integrate an existing loyalty program or build a new one. This way, using smart contracts the transactions are secure, transparent and can be tracked to avoid frauds and errors arising in a customer loyalty campaign.
"For any B2C business, 'loyalty and reward' is the number one customer retention tool. But don't perturb your customer in the name of rewards by forcing them to purchase from you again. Give them exclusive lifestyle goodies, and if that's too complicated, give them cash back - even better reward them with cryptocurrency," shared Palash Bagchi, the founder of Retainly Technologies.