As blockchain providers and technicians look for ways to use the technology to benefit the loyalty industry, they should focus on how the technology will improve the loyalty ecosystem rather than the nuances of the technology, Bill Hanifin, Chief Executive Officer for the Wise Marketer Group and CEO of Hanifin Loyalty by Impact 21, told the audience at the Loyalty Live seminar in Chicago.
“It’s a fertile field for you,” Hanifin said, admitting that using blockchain to track customers, points, rewards and other aspects of loyalty program would present a challenge for many in the industry, but it could also represent a huge opportunity to improve many programs that aren’t producing the results that the providers or the program members want.
“Change is a constancy of life,” Hanifin said. Though for some change leads to panic, for those who take advantage of the benefits that change can bring, it represents a large opportunity. In the loyalty industry, one of the potential benefits would be to have some of the estimated 50-70 billion of unredeemed points converted to rewards, though there are some providers, like airlines, that see “breakage” as an advantage.
Hanifin pointed out that “loyalty” has changed, because companies can no longer wait until a consumer is a customer to build a relationship. Customers today are making their decisions about the companies they will do business with much earlier in the process, researching companies and products prior to purchasing. So loyalty providers have very little time to win a customer’s loyalty – rewards need to come quickly or a customer will leave. About 40% quit within the first 90 days.
Hanifin added that 4% of customers surveyed said they would not join a loyalty program, while 23% said that once they start doing business with a company they stay loyal. So seven in 10 consumers are willing to shift their business if a brand can offer better option(s).
Brands need to master mobile moments, Hanifin said. “Mobile is not just a channel, it’s a lifetime device for people to interact and redeem points.” He pointed to the example of Cumberland Farms, which provides loyalty members with a 10% discount if they use Paypal – thus saving the merchant on credit card interchange fees – and the loyalty app also turns on the gas pump. While pumping gas, the user may get an offer for a discount for something inside the store.
“Time and convenience are becoming the ultimate currency,” Hanifin said. “Technology enables, but strategy wins. There are endless possibilities for what you can do with block chain.”
Some of those possibilities were discussed in an earlier article in The Wise Marketer.
Phil Britt is a reporter for The Wise Marketer.