How can smart contracts and tokens enable customer loyalty in the physical world?
How your company benefits from utilizing them?
Nowadays tokens are enabling new ways to purchase products and services, enhance customer experiences, drive sales and strengthen customer trust and loyalty. Furthermore, tokens can provide valuable data to help retailers better understand their customers: users acquire brand tokens in exchange for sharing preferences, purchase histories, profiles on their preferred styles and other data. All these data are then stored and used by the companies to improve interactions and experiences between shoppers and company brands.
Access to accurate consumer data is key to more effective ad-targeting, and, ultimately, to a growth in sales.
Increasing customer engagement means increasing transaction volume.
According to KPMG`s report when a customer is loyal to a brand:
- 86% will recommend a company to friends and family;
- 66% are likely to write a positive online review after a good experience;
- 46% will remain loyal even after a bad experience.
Tokens can be used as network incentives to drive user behaviours within a blockchain ecosystem to achieve target business outcomes.
By using this technology companies are able to:
- activate customer engagement;
- grow traffic to your digital shops;
- increase the added value generated by exploiting the ecosystem created;
- rise in sales;
- create a network of partnerships and gain access to an ecosystem of potential customers. This network will be a shared scalable infrastructure between brands from different sectors.
Smart contracts and token can help your sales reps to achieve better results but can also offer others advantages.
From a business perspective, everyone benefits: companies because branded tokens do not impact the company balance sheet as the users directly own the token. The costs related to issuing and redeeming reward tokens are much lower on the blockchain, as it does not require a third party. Blockchain significantly reduces system management costs, thanks to smart contracts that automate processes, while at the same time reducing costs related to error instances.
Additionally, brands themselves benefit from accessing an ecosystem of already loyal customers, which once again lowers acquisition costs.
Marketing department can have a much more customer-centric loyalty program, giving the power back to the people. In addition, operations are reduced, as the interoperability of tokens is vastly simpler and more automated.
Smart Contracts and Tokens enable customer loyalty! What about consumer’s point of view?
Consumers like tokens. The existing loyalty program models are only pain for them because there are “too many cards to carry” and the signup process is overly complex. There is a term called “breakage” used in the loyalty industry to refer to reward points that are not redeemed. Complicated or inconvenient redemption processes could be the reason that 30% of consumers haven’t redeemed rewards over the last year or more. Consumers’ biggest complaints with loyalty programs centre around how long it takes to earn a reward and how difficult it is to get. Other negativity: rewards or points expire too quickly. When a consumer’s hard-earned rewards expire before they can figure out how to use them, it can actually damage the relationship you were trying to reward in the first place.
By using tokens all these problems disappear
The procedure is simpler: once blockchain tokens are in the consumer`s wallet, they belong to them. The issuing company cannot expire them nor revoke them; the company cannot arbitrarily change the rules on its customers.
Furthermore, tokens could be swapped for other cryptocurrencies.
Blockchain is disrupting retails!
The technology is in place and the market is ready. It is time for companies of all sizes, and across all sectors, to use smart contracts and token to enhance customer loyalty and innovate their business models.
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