Building customer loyalty programs are much more complex than just handing out rewards. Undoubtedly, a promising reward program compels a customer to choose a particular business place.
As a matter of fact, a study revealed that the popularity of customer loyalty programs is soaring. According to the study, almost 77% of the consumers enroll in some kind of retail loyalty program. Then why does the customer loyalty program need blockchain?
The fact is that the full value of customer loyalty programs is far from being realized.
A report by Bond shows that an average consumer is enrolled in 14.8 or more customer loyalty program. However, only 6.7 programs are being used actively. Primarily, because the reward redemption systems are not efficient enough.
The active usage of loyalty programs has declined by 10% in 2018. Effectively, reward points worth billions of dollars were never redeemed. Moreover, these unclaimed rewards are a huge liability for a company, as it also impacts:
1) The percentage of repeat sales
2) Word-of-mouth marketing
3) Hands over the customer to the competitor.
Enter Blockchain
According to DigitalBits founder, Al Burgio, friction, and cost of running efficient loyalty programs have diminished the value of loyalty and rewards programs. The two major concerns are:
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Lack of liquidity
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Reward programs operating in silos
Projects like DigitalBits are working to unify customer loyalty programs using blockchain. As an open-source decentralized blockchain platform, it allows companies to create loyalty tokens. These tokens are associated with customer loyalty programs. Once the token’s creation is complete, they become 100% transferable. Consequently, these tokens gain access to a wider marketplace. Thus, the conversion or trading with other reward points becomes possible.
DigitalBits Features
As a feature-laden blockchain, DigitalBits utilizes a robust consensus mechanism. This protocol supports throughput of 10,000 TPS. However, the protocol also works at the backend to optimize the infrastructure. Consumers get to use it without a learning curve.
The protocol is designed in a way that it can easily become part of existing applications. As a result, consumers do not have to learn a new way of accumulating and redeeming rewards. They will take advantage of blockchain but not at the cost of user experience. Consumers will not have to undergo any complex process or use clunky apps. Furthermore, this will ensure, the communities stay connected. Also, businesses and consumers will not have to switch platforms.
Some of the important features are:
- Multi-Hop:
A transfer allows up to 6 hops which provide higher liquidity to any reward asset even if no direct market exists. It is capable of automatically matching the asset pairings. Thus it offers near-instant order fulfillment and frictionless transfers. - Multi-Asset Support:It will use the DigitalBits protocol to support multiple assets and facilitate mass market liquidity
- Distributed Exchange (DEX):
DigitalBits features a built-in decentralized exchange. The exchange has multi-hop technology at the core. With that, it creates a flexible trading environment. - Easy processes of integration:Existing brands, systems, and strategies do not need to learn new technology or a new app. Custom apps can be easily developed using DigitalBits API and SDK library. Moreover, the protocol can be easily integrated into an existing app.
DigitalBits offer a native token known as XDB and it has 4 major utilities in the ecosystem:
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The platform users need to stake a minimum of 10 XDB to use DigitalBits. This is a protective security feature.
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It acts as a bridge between different digital assets.
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Pay transaction fee on the platform in XDB
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The node operators can earn rewards in XDB
In the last 30 days, XDB is up by 22.4% and is trading at $0.0188134 at the time of publishing. In the month of May, an Ex-Nasdaq strategist bought some XDB and supported branded currencies offered by DigitalBits. Here is the coverage by Altcoin Buzz:
Direct benefits of blockchain-based cryptocurrency rewards
The blockchain-based cryptocurrency reward platforms like DigitalBits offer advantages for both customers and brands, these include:
- Lower operational costs
Blockchain-based reward programs are efficient as they offer better system management. Effectively, this helps in better customer and transactional acquisition. As these programs are efficient, they reduce system management costs and prevent fraud. Moreover, projects like DigitalBits add a new dimension to loyalty programs. That’s because they offer mass liquidity to theoretically any token. - Decentralization of reward systems
In a traditional reward system, the points are stored on a centralized server. In case of a hack or a fraud, a customer can lose all his reward points. But if the customer uses a DEX like DigitalBits for a reward program, he will be in complete control of his reward point assets. - Near-instant experience
On a highly robust blockchain as DigitalBits, the transactions can happen instantly. Thus, the reward redemption process becomes quick and engages more customers. - Secure environment
56% of consumers today do not feel comfortable sharing their personal information with brands. As blockchain is immutable, the complete consumer data is secure on the blockchain. With that, a consumer feels secure to enroll for a loyalty program and take full advantage of the same. - Business opportunities
Loyalty reward programs have proved that they can play a vital role in retaining customers. Using blockchain, brands can create efficient loyalty programs and can engage more customers. DigitalBits is taking a unique approach as it is not asking anyone to change their learned behaviour. Moreover, it is offering protocol integration to existing apps in such a way that both customer and brand continue using the existing app. However, after integration, the app becomes efficient and has access to mass market of 100% transferable assets.
To Conclude
DigitalBits technology has undergone multiple iterations of development and it is ready for enterprise adoption. Moreover, as the loyalty and rewards point industry keeps to grow, DigitalBits will see more adoption.
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Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided.
Do your own due diligence and rating before making any investments and consult your financial advisor. The researched information presented we believe to be correct and accurate however there is no guarantee or warranty as to the accuracy, timeliness, completeness. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. This interview, overview, or update article has been compensated for media cooperation and has been sponsored for by the interviewed or reviewed organization. Copyright Altcoin Buzz Pte Ltd. All rights reserved.
