{"id":331541,"date":"2021-08-28T10:11:00","date_gmt":"2021-08-28T07:11:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/brands-must-tokenize-their-loyalty-and-rewards-programs\/"},"modified":"2021-08-28T10:11:00","modified_gmt":"2021-08-28T07:11:00","slug":"brands-must-tokenize-their-loyalty-and-rewards-programs","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/brands-must-tokenize-their-loyalty-and-rewards-programs\/","title":{"rendered":"# Brands must tokenize their loyalty and rewards programs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a29d73b325e7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a29d73b325e7\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/brands-must-tokenize-their-loyalty-and-rewards-programs\/#Reimagining_rewards_points\" >Reimagining rewards points<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/brands-must-tokenize-their-loyalty-and-rewards-programs\/#The_limitations_of_loyalty_and_rewards_programs\" >The limitations of loyalty and rewards programs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/brands-must-tokenize-their-loyalty-and-rewards-programs\/#Enter_Branded_stablecoins\" >Enter: Branded stablecoins<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/brands-must-tokenize-their-loyalty-and-rewards-programs\/#A_bumpier_on-ramp_before_takeoff\" >A bumpier on-ramp before takeoff\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Brands must tokenize their loyalty and rewards programs <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvN2E5YjIwMzItNDQ0MC00YzcxLWI3NGMtYzBiNmFmMjc0ZjAyLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>The adoption of nonfungible tokens has served as a practical entry point for users joining the crypto economy, driven primarily by their respective fandoms and the benefit-centric nature of the tokens. For instance, if you&#8217;re a Lebron James superfan, you can understand why \u201cThe Block\u201d from the 2016 NBA finals is valuable on NBA Top Shot without understanding the blockchain. But when it comes to brands, stablecoins are likely to become the biggest entry point.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Reimagining_rewards_points\"><\/span>Reimagining rewards points <span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Selling to existing customers costs brands less than acquiring new ones, which is a leading reason why more than 90% of companies <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.accenture.com\/_acnmedia\/pdf-43\/accenture-strategy-gcpr-customer-loyalty.pdf\">have<\/a> some type of customer loyalty program. Rewards points are one of the most effective methods for increasing both customer loyalty and revenue. For example, Starbucks Rewards is one of the most successful rewards programs around. It has more than 19 million members, with the redemption of points <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/stories.starbucks.com\/press\/2020\/starbucks-reports-q4-fiscal-2020-results\/\">responsible<\/a> for almost 50% of company revenue. Starbucks utilizes Starbucks Rewards to align with its business goals in a way that adds value and increases customer engagement through a fun, gamified <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roach.<\/p>\n<p>Starbucks\u2019 approach to reach the masses is very different from Neiman Marcus, which is focused more on status and exclusivity through its VIP, tiered rewards program InCircle. As an InCircle member climbs the tiers, they unlock access to concierge services that help customers plan extravagant vacations or attend sought-after events. Effective loyalty programs are not a one-size-fits-all solution, but a carefully tailored program can do wonders for revenues, engagement and retention. The evolution of digital assets now allows brands of any category to offer their consumers a unique and memorable experience.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Understanding the systemic shift from digitization to tokenization of financial services<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_limitations_of_loyalty_and_rewards_programs\"><\/span>The limitations of loyalty and rewards programs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While it&#8217;s undeniable that loyalty and rewards programs are an essential component of the consumer-brand relationship, they have their limitations. Complexity, lack of liquidity, and interoperability are some of the main roadblocks to expanding loyalty and rewards programs to more customers. The lack of clarity around program rules leads to a lot of value left on the table. <\/p>\n<p>According to a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.claruscommerce.com\/blog\/17-staggering-customer-loyalty-stats-that-will-change-your-perspective\/\">report<\/a> published by Clarus Commerce, 75% of consumers\u00a0want to be rewarded for engagement beyond their purchase. This alone signals the need for innovation and creates a massive opportunity for brands to revolutionize the business of loyalty.<\/p>\n<p>When it comes to liquidity, the use of most points and rewards is limited to their respective brand ecosystem; consumers cannot redeem them at another company. Hotel brands such as Hilton, Hyatt and Marriott allow points to be <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.businessinsider.com\/personal-finance\/free-hotel-stays-credit-card-rewards-points\">used<\/a> like cash within a certain threshold. However, this is only permitted during hotel stays \u2014 and in most cases, points are valued differently than dollars. That is not to mention issues like blackout dates or the limited number of rooms available for points. Because these programs lack interoperability, points are trapped behind a walled garden, restricting the movement of value. Impeded value transfer and lack of cross-program communication results in lower customer engagement and, in some cases, voided points. <\/p>\n<p>If points systems more closely resembled cash in their ability to be spent, they would be much more successful. Despite these varying degrees of liquidity, what appears clear is that brands embracing this change are looking to grab consumer attention by introducing as much flexibility as possible in the usage of points currency.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Enter_Branded_stablecoins\"><\/span>Enter: Branded stablecoins<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A branded stablecoin is a price-stable digital asset issued and supported by specific \u2014 or groups of \u2014 brands, enterprises or institutions. Branded stablecoins, which can be embedded directly into consumer-facing applications, offer brands a novel way of connecting directly with customers and acquiring insights to regain market share from competitors. Because blockchain and cryptocurrency remain strange concepts to most consumers, it&#8217;s essential to have a seamless experience where users may not even realize blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> is powering the system.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Cryptocurrency and the rise of the user-generated brand<\/em><\/strong><strong><em> <\/em><\/strong><\/p>\n<p>Enabled by secure and transparent decentralized ledger technology, branded stablecoins provide marketing intelligence to brands on who their biggest fans are. At the same time, branded stablecoins incentivize and reward customers for their loyalty. Brands can store user purchasing histories on the blockchain and then apply associated savings to their purchases in the future. It\u2019s akin to loyalty points but less complicated, more liquid and ultimately more useful. Other features could include removing the need for a credit card or even providing interest on branded stablecoin savings to incentivize customers to hold.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_bumpier_on-ramp_before_takeoff\"><\/span>A bumpier on-ramp before takeoff\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Despite branded stablecoins being a step in the right direction, tokenized reward systems are still a form of centralization. A third party \u2014 in the form of a brand, bank or both \u2014 may be present to achieve one-to-one stability, bridging the gap between traditional finance and crypto. The upside to this centralization is that it potentially presents a more intuitive experience for the user, where they don\u2019t have to download different apps or become acclimated to a new process. However, brands could find themselves having to make a hard decision between a frictionless, centralized user experience or a bumpier, decentralized on-ramp. <\/p>\n<p>There is also the brands\u2019 bottom line to take into consideration: Minting and redemption costs can be high due to expensive gas fees. Compounded with the brands\u2019 operational, auditing and compliance costs \u2014 and combined with interoperability with legacy banking systems \u2014 this could present expensive barriers to entry. The uncertainty of regulations\u00a0makes the waters even murkier. Brands might need to decide on taking a loss upfront for delayed future benefits. These are nuanced, mission-critical decisions that brands will have to make. <\/p>\n<p>Consumers feel empowered and perceive greater value when receiving currency in their app instead of recieving points. For many, brands are an identity symbol. Let&#8217;s say Gucci identifies you as an ambassador and airdrops Gucci tokens to you as a thank you for posting positively about the brand across <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social media<\/a> using your \u201cGucciCoin\u201d public tag. If you own a certain amount of \u201cGucciCoin,\u201d you may get access to an elite community, be it a physical space (an exclusive event, concert, in-store showroom, etc.) or an online one. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Haute Couture goes NFT: Digitalization at the Paris Fashion Week<\/em><\/strong><\/p>\n<p>Perhaps you even get access to advanced or limited-edition merchandise drops others wouldn&#8217;t get and receive an NFT that allows you to showcase your status. Branded stablecoins are a win-win for brands and customers, enabling consumers to signal their support while brands increase engagement and loyalty.<\/p>\n<p>Branded stablecoins provide a gateway for an interoperable, liquid and frictionless future. One day, maybe not so far off, a customer will have a digital wallet filled with all of their favorite brands, a global ecosystem opening up the floodgates for mass adoption.<\/p>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Michael Gord<\/strong> is the managing director of the DigitalBits Foundation and founder of GDA Capital. He has contributed to some blockchain ecosystems, including TRX, LRC, and ONT. He also served as the first enterprise blockchain developer at Toronto-Dominion Bank (TD Bank Group), one of Canada\u2019s largest banks.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"consulting_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/brands-must-tokenize-their-loyalty-and-rewards-programs\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Brands must tokenize their loyalty and rewards programs &#8221; The adoption of nonfungible tokens has served as a practical entry point for users joining the crypto economy, driven primarily by their respective fandoms and the benefit-centric nature of the tokens. For instance, if you&#8217;re a Lebron James superfan, you can understand why \u201cThe Block\u201d&#8230;<\/p>\n","protected":false},"author":1,"featured_media":331542,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvN2E5YjIwMzItNDQ0MC00YzcxLWI3NGMtYzBiNmFmMjc0ZjAyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,74863,75493,74892,74355,4965],"class_list":["post-331541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-cryptocurrencies","tag-stablecoin","tag-tokens","tag-adoption","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/331541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=331541"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/331541\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/331542"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=331541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=331541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=331541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}