7 Companies Adopting Blockchain Loyalty Programs

Travel, retail, financial, and other economic sectors have implemented loyalty programs to retain their customers. As a result, there is a labyrinth of point systems and redemption options everywhere, with a complex process for exchanging points between program partners.

Since loyal customers are so important to any business, it's no wonder brands are spending more and more budgets on retaining them, encourage repeat purchase and brand advocacy.

One emerging solution gaining popularity is the integration of  blockchain technology into customer loyalty programs. The aim is to revolutionize these programs by addressing some of the shortcomings associated with traditional approaches.

By leveraging blockchain technology, businesses aspire to streamline loyalty programs, making them more efficient and user-friendly. The decentralized nature of blockchain can enhance transparency, security, and ease of point redemption, thereby improving the overall customer experience.

This innovation holds the potential to reshape the landscape of customer loyalty programs and provide a more seamless and rewarding journey for both brands and customers alike.

Companies with Blockchain Loyalty Programs

While the buzz surrounding blockchain loyalty programs may not have reached the Indonesian market yet, these innovative rewards programs have gained significant traction internationally.

Numerous global companies have begun venturing into the realm of blockchain technology to harness its potential for their loyalty programs.

Let's take a look at a few notable examples.

1. Singapore Airlines

In July 2018, Singapore Airlines announced that their frequent flyer program, KrisFlyer, will now be converted to KrisPay, a miles-based digital wallet that members can use to convert miles into digital currency for shopping with various partner merchants.

At the launch, KrisPay partnered with 18 merchants across categories ranging from beauty and food services to gas and retail. The press release announcing KrisPay described it as "the world's first blockchain-based airline loyalty digital wallet"; revolutionizing the way customers could utilize their loyalty rewards.

2. Chanticleer Holdings

Chanticleer Holdings, known for investing in various burger restaurant chains such as BGR, Little Big Burger, and American Burger Co., has emerged as a frontrunner in blockchain-based loyalty programs. In January 2018, the company announced its partnership with MobivityMind, a blockchain architecture platform.

As part of their new loyalty program, customers who dine at any of Chanticleer Holdings' restaurants are rewarded with a cryptocurrency called Mobivity Merit. This digital currency can be used across different brands within the company and can be traded securely, without the risk of fraud.

As Chanticleer Holdings CEO Michael D. Pruitt explains: "We love to see how consumers respond to  ​​getting real, transferable, and secure value in return for their loyalty to our brand."

3. American Express and Boxed

In May 2019, American Express unveiled a blockchain testing program in collaboration with Boxed, an online wholesale retailer. The purpose of this initiative was to leverage blockchain technology to establish a private system exclusively for Boxed, facilitating the transfer of information that merchants can utilize to fulfill rewards program offerings.

When a customer makes a purchase on Boxed, the blockchain securely stores transaction data while keeping sensitive cardholder information confidential. These transaction details serve as triggers for the creation of smart contracts, which then generate and distribute points within the backend loyalty system.

4. AirBaltic

AirBaltic has been accepting bitcoin as a payment method for airline tickets since 2014. In their most recent development, the company has decided to issue an additional 10,000 NFTs (non-fungible tokens) linked to their loyalty program.

The collection, called 'Planies,' is a series of 10,000 distinct cartoon planes with unique design features. It is set to launch in May 2022. AirBaltic plans to sell these Planies through a dedicated website and utilize them for advertising purposes.

Furthermore, the NFTs will be integrated into the onboard entertainment system, providing passengers with an interactive experience.

5. Venmo

Venmo has introduced a new feature called "Cash Back to Crypto" that enables its credit card customers to convert their monthly cashback rewards into cryptocurrencies.

Users now have the option to choose between bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH), which are the same four cryptocurrencies available on the Venmo app.

After completing the transaction, customers have the flexibility to either store their crypto within the Venmo app or sell it. However, it's important to note that the program does not support transfers to external wallets outside of the Venmo platform.

6. Shake Shack

Shake Shack is embarking on its cryptocurrency venture through a promotional campaign that offers Bitcoin rewards to select customers.

Under this promotion, customers who use the Cash App with a debit Cash Card to make purchases at Shake Shack will receive 15% cashback. However, rather than receiving the cashback in traditional currency (dollars), the reward will be paid out in the form of Bitcoins.

7. Loyal

Loyal, a company established in 2014, provides a loyalty platform known as "blockchain as a service" for businesses operating on the Hyperledger network.

This platform aims to expand and improve current CRM and loyalty systems. Notably, Loyyal has already attracted prominent clients such as airlines based in the Middle East, Star Alliance, and Bond Brand Loyalty, showcasing its strong customer portfolio..

How Blockchain is Disrupting Loyalty ?

Blockchain technology is making a significant impact on loyalty programs, revolutionizing the way they operate. While cryptocurrencies have gained considerable attention, the potential of blockchain in loyalty and customer relationship management (CRM) has been less explored.

By adopting blockchain technology, companies can streamline their partnership processes without adding unnecessary complexity to their loyalty programs. This means they can quickly establish and maintain partnerships, enhancing the program's value and offerings.

One significant advantage of blockchain is that it enables businesses to offer customers a wider range of options for redeeming their loyalty points. This addresses the growing demand from consumers for personalized experiences and digitally-enabled services that go beyond mere segmentation. With blockchain, companies can create more tailored and comprehensive customer journeys, providing convenient one-stop services.

Although blockchain technology for loyalty programs is still in its nascent stage, its potential for disruption is immense. As more large companies explore the possibilities, either by transforming their existing loyalty programs or building new ones from scratch, the global impact of blockchain in loyalty is likely to grow significantly.

This technology has the power to reshape how loyalty programs operate on a global scale, offering new opportunities for businesses and customers alike.