Written by Florence Ip
How big is the Loyalty community?
According to statistic research by Access in 2020, 90% of companies have some sort of loyalty programs. 90% of people in developed countries join membership for at least 4 brands. 61% of people are loyalty to 1-5 brands, 26% are loyal to 6-10 brands and 6% are loyal to 11-20% brands.
In fact, the redemption rate of loyalty program is very low, just 7%. Most people do not know the value of their loyalty points and let their loyalty points expire. According to Deloitte’s data, each program costs at least USD4 to a merchant. Loyalty points are liabilities of merchants, so they need to clean up their liabilities annually and confiscate those benefits from their loyal customers. As a result, many loyalty programs have a timeframe, and loyalty points will usually expire by the end of each year. Anyway, the loyalty points market and the gift card market were accounted over USD 1 trillion businesses in 2019.
How does pandemic affect the loyal community?
Economy has been slowed down since early 2020 by pandemic. People cannot go out for business nor shopping. 77% of brands have been closed down without any notice. Customers have loyalty points kept in their accounts but shops are not doing business. Loyalty points cannot be redeemed before expiry date.
Especially, travellers, who have earned plenty of air-mileages and hotel reward points, can do nothing to stop their loyalty points disappear from their accounts. Almost all the flights have been cancelled and everyone have been staying at home over a year to fight against the pandemic. Although all airlines and hotels are suffering right now, customers are still frustrated to the restrictive redemption policies set by them. Loyalty program, which aims to build long term customer relationship and rewards loyal customers, is becoming a trigger to disappoint their customers.
How can Blockchain solve the conflict among merchants and their loyal customers?
Blockchain is an innovative technology to keep digital contents into cryptographic and to share the information with other users in the network. All contents on the chain will be immutable and transparent. Users, who share the digital ledger, can look up the chain and track historical records.
With a multi asset conversion engine in the blockchain infrastructure, all digital assets within the chain can be evaluated and converted from one to another. Accordingly, when air mileages, hotel reward points, e-vouchers, gift cards and in-game assets are stored in the blockchain, they will be valued by the conversion engine. As a result, each digital asset will have a prevailing price that will enable users to exchange their assets within the chain. Smart customers will convert their expiring air miles to other digital asset such as gift card.
How can Blockchain turn an idle asset into valuable asset?
Furthermore, when the blockchain is connected to a crypto exchange directly, user will have the access to buy and sell cryptocurrencies, including Bitcoin.
Recently, Bitcoin tries to reach its all times high, USD63,253 again. Some people are waiting to buy Bitcoin at a lower price, but it may not happen and they may miss the investment opportunity.
However, reward points and idle digital assets may have very little meaning to some owners. Being savvy investors, they will utilize the new technology development, aggregate all their idle reward points together and convert them into cryptocurrency. Eventually, the customers do not only able to spend their expiring loyalty points but also diversify their investment into alternative asset i.e. cryptocurrency.
DragonBite is an innovative multi digital asset management platform
DragonBite is a digital wallet for all customers to store their digital assets, including Loyalty points, E-vouchers, E-coupons, Gift cards, Air mileages, In-game assets and Cryptocurrencies. This innovative system will not only help customers to aggregate all their scattered digital assets together but also allow customers to access crypto investment in order to preserve their loyalty value continuously. Nonetheless, a disruptive Revolution of Loyalty Customer is already initiated, that everyone should get involve to benefit from it.