In today’s culture, methods to attain customer loyalty are commonplace across many different industries. Loyalty programs are used to increase retention, lower acquisition costs and serve as a vital aspect of a consumer’s journey well beyond a purchase.
In 1872, the Grand Union Tea Company issued paper coupons to potential consumers which could be used in exchange for merchandise in their catalog. In 1972, General Mills, one of the most renowned brands in the US for food and recipes, took this concept a step further by driving consumers to purchase and redeem their premium products using ‘Betty Crocker Points’ which were composed of coupons from the packaging of major General Mills products. The 75-year program was discontinued in 2006.
Frequent Flyers, one of the most well-known loyalty programs ever developed, was also born in the late 1900s. American Airlines’ Frequent Flyer program, which began in 1981, was widely considered the first full-scale loyalty program of the contemporary age. Today, the redesigned AAdvantage program currently has over 50 million members in its database.
Retailers began to use what we refer to today as “loyalty aggregators” in the late 1900s, which are software-based systems that make points universal, in the sense that they can be redeemed across several brands tied to the aggregator’s network. In the 1990s, card-based loyalty programs became widespread. Retailers wanted to adopt in-store loyalty programs that were easier to track than stamps or branded money. In fact, this system is still widely used today.
Amazon launched in 1995, grew, and was responsible for 44% of all US e-commerce sales in 2018, which surely only increased during the height of the pandemic. With online shopping increasingly becoming the new norm, industries saw the potential of allowing customers to earn rebates based on their purchases. Shopee, a subsidiary of Sea Ltd., allows its users to earn Shopee coins which could be redeemed for discounts on products and shipping. They are earned each time a consumer decides to make a purchase on the platform.
Customer loyalty programs are one of the most important enablers for businesses to grow in today’s competitive market. And according to Colloquy, there are 2.65 billion loyalty program participants in the United States alone. Every year, businesses spend a whopping $2 billion on loyalty programs. With the growth of digital payment infrastructures, anybody can establish a reward program for their shop or website. A loyalty program is no longer exclusive to retail powerhouses with many of the most popular programs being available online and on mobile apps.
Although businesses are enthusiastic about these initiatives, many are unaware of how effective/ineffective their loyalty programs are. This is because of inefficiencies when it comes to evaluating and tracking progress toward customer loyalty targets. Rushing ahead with plans to create a customer loyalty program without considering if it would be an advantage or if it simply drains time and resources.
While loyalty programs used to reward consumers for spending a set amount of money in a business, they are now used to reward customers for a number of specific behaviors instead. The choices for customer rewards are nearly infinite, ranging from points for social media shares that expand a retailer’s marketing scope to rewards such as free merchandise or online features that bring in new consumers and increase revenue.
Additionally, a slew of corporations have come up with creative programs meant to increase client loyalty. The food company Subway previously had an initiative called Sub Club cards, which allowed customers to win a free sandwich after purchasing eight. Cole’s stores in Australia have phased out a scheme that offered product discounts ranging from 3% to 7.5% to owners of the company’s stock. eBay discreetly ended its Anything Points program for consumers in the United States. Target’s novel strategy using “smart” credit cards appears to have fallen short. The combined customer-loyalty program between American Airlines and America Online has been discontinued. The list could go on and on. Despite the fact that loyalty programs are springing up left and right, many are being canceled, and not with a sense of accomplishment.
BitFans — Redefining Loyalty
At BitFans, we’ve discovered that many parts of loyalty programs are difficult to get correctly. Given that loyalty programs may provide a range of advantages, the problems begin with defining company goals. Some businesses will implement loyalty programs that are not in line with what their consumers want. There is a need to create incentives that are sufficient to influence behavior but not so generous as to disrupt the flow of business. In addition, there are psychological factors that come into play, such as why two rewards of seemingly similar value may motivate vastly different degrees of purchase depending on the consumer.
Furthermore, a system that sometimes includes cards or complicated registration processes is also beginning to lose favor with modern community members. Stringent regulations and transactional rewards can have the reverse effect of enhancing the experience, reducing the excitement all together.
This is where our technology comes in. BitFans enables creators, businesses and brands to create a digital asset called a Community Token. These tokens are a form of cryptocurrency that is tied to a brand’s community, growth, and overall reputation. They can be used in a number of ways within a brand’s ecosystem.
At its core, community tokens are being developed as a means of providing accessibility to consumers and members of an ecosystem. Just like membership cards, they also serve as proof that one belongs to a community built by their favorite brand/s. This gives them an avenue to provide critical feedback, address looming concerns, and gain access to exclusive perks and benefits, much like how current loyalty programs function today.
Perhaps the most exciting aspect lies in the fact that there is a level of governance in that consumers can have a say in various aspects of the brand, including choosing designs, selecting partners to work with, generating alternative avenues for alignment or simply voting on fun and creative decisions.
As we progress toward increasingly decentralized systems, the power of individuals is growing, even more so than the power of brands. BitFans serves as the middle ground for both, allowing them to participate in an ecosystem that incentivizes everyone to drive growth beyond just discounts and redeemable points. This is why it’s critical for them to explore this channel and cultivate genuine relationships rather than rely on a single sales channel.
Are you interested in learning more about BitFans? Join our community of like-minded individuals and organizations and feel free to contact us using any of our socials: https://linktr.ee/bitfans