The following is an excerpt from the new e-book, The CMO Primer For The Blockchain World: How This “Trust Machine” Impacts Branding, Customer Experience, Advertising and Much More by Jeremy Epstein, CEO of Never Stop Marketing.
It features forewords by the CMO of Nasdaq, Jeremy Skule and the CMO of Dun & Bradstreet, Rishi Dave. The e-book explores seven different marketing functions and how blockchains might impact them as well as highlighting a few emerging vendors in the blockchain marketing tech space.
To download the FREE e-book, please click here.
Today’s guest post is by Sean Dennis, CHO and Co-Founder of Loyyal (@iamseandennis)
Sean is a seasoned entrepreneur with an international background. Having grown up in the UAE (Dubai), Hong Kong, Europe, and Latin America, he brings a wealth of global perspective and experience to the Loyyal team. He is passionate about loyalty and behavior incentification, and the way in which blockchains and smart contract technology can enable it. He holds a masters from CASS business school (UK).
Blockchains Will Make Loyalty Programs Work Better
Loyalty and rewards is an increasingly important part of a company’s marketing strategy, and in some customer centric businesses is the no.1 strategic goal. The traditional loyalty program was developed in the 80’s and has experienced only iterative innovation since then. The industry has grown to well over a $100 billion per year in points issued in North America. Operators simply do not have the technology or capabilities needed to deal with the rising costs, increasing competition, and an increasingly digital (therefore more demanding) consumer base. This has resulted in rising consumer disengagement (the average household in the US has 22 membership programs, but they are active in less than half of those), higher program operating costs, and in some cases, unwieldy liabilities upsetting balance sheets, not to mention the revenue risks of a ‘run on the bank’ scenario.
Let’s look at what blockchain (Loyyal) enables, and what capabilities it provides the operator with.
Scalability– One of the main desires of the millennial consumer/loyalty program member is greater redemption options. Using blockchain, partner integration cost, effort, and time needed to set up and operate is drastically reduced as partners connect via the blockchain and are issued a permissioned wallets with agreed upon rules as well as liability assignment to share data and manage points.
Interoperability – Blockchain provides near real-time capabilities to connect the customer journey and move value along with the customer, increasing speed by removing the need for reconciliations and trusted intermediaries. The consumer receives higher utility for points and a more dynamic experience; the operator can target increased revenues with contextually relevant offers.
Multi-Branded Programs – This is a potential game-changer for larger program operators, alliance, and coalitions. Blockchain provides cascading permission capabilities within networks as sub-branded programs. This means network partners can build their network value and run partner promotions whilst retaining control of their brand and programs (subject to rules set by the program operator). Basically providing a shared value proposition across businesses and common partner pool that is already available.
Dynamic issuance and redemption capabilities – Blockchain allows for near real time targeting of consumers through chain data that “objectifies” points issued as branded tokens. Smart contracts can read this data and can be programmed to respond instantly, which means that consumers can be targeted dynamically. Based on the increased data provided, they can be rewarded for behaviours that they actually are likely to achieve. This means a more satisfied (and therefore more loyal) customer base and a greatly increased efficiency in the loyalty reward spend ROI.
Effectively, what blockchain provides operators with is a lower operating cost base and the benefits of programmable tokens. Utilising this means changing old process and inventing new opportunities to better manage the customer experience, programme costs and return on loyalty investment. This is an incredibly powerful tool.
Marketers should be paying attention and beginning to work, research, and plan their marketing/loyalty strategy in the decentralized world. It is fast approaching, and although many think of blockchain as a financial tool, the benefits from a marketing perspective are clear.
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