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5 Ways the Blockchain Can Increase Customer Loyalty And Win Brands’ Battle for Engagement

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With Singapore Airlines and Delta Air Lines having recently introduced a blockchain-based loyalty program and replacing its air miles with cryptocurrency, it shows that blockchain stands to radically transform traditional loyalty programs as we know them, making them more useful, accessible and cost-effective for both brands and customers alike.

So, how is blockchain increasing customer loyalty and revitalising traditional rewards programs?

1. Blockchain introduces cost-cutting efficiencies, including cutting out high customer acquisition costs for brands.

From the technical implementation right through to the costs of the rewards themselves, loyalty programs can be both expensive and tedious to set up and demand a significant investment of time and money.

Transaction costs related to the issuance and redemption of reward tokens are much lower on the blockchain since they do not require a third-party. Blockchain also significantly reduces system management costs, thanks to smart contracts that automise processes, all while reducing costs related to instances of error.

On top of this, brands themselves benefit from having access to an ecosystem of already loyal customers, which again reduces acquisition costs.

2. Blockchain encourages increased customer engagement and points redemption.

Loyalty programs are not only difficult to set up, but it is difficult for brands to attract new customers by means of a loyalty program. Blockchain is flipping this on its head by introducing loyalty at the start of the customer journey, as opposed to at the point of purchase.

In other words, loyalty points are no longer an afterthought when they can be exchanged within the brand, with other brands, or for cryptocurrencies or fiat. Better still, the potential for loyalty points to rise in value and get the customer more attractive rewards creates excitement that was never before a part of the loyalty program experience.

Customers are also then driven to check their loyalty programs more frequently since the reward options are more varied, thanks to an ecosystem connecting different programs.

3. Blockchain increases security and therefore encourages loyalty.

All transactions recorded on the blockchain are cryptographically secured, meaning that participants of the network have their own private keys (akin to their own personal digital signature). Blockchain’s immutable and tamper-proof nature also means that every transaction is traceable, which eliminates the potential for fraud or other misuses of the system (which is, again, connected to costs).

Additionally, as there is no single point of failure, customers no longer have to worry about the storage of their private data with large retail companies. On the blockchain, data is stored across the network, which makes it inaccessible via a single entry point. All of these features make customers more comfortable with sharing their details, as well as executing transactions on the blockchain.

4. Blockchain offers a one-stop shop for customers to collect and redeem points.

Customers often suffer from ‘loyalty program fatigue’ due to the vast number of programs available, which subsequently leads to loyalty program inactivity. Blockchain provides a frictionless system, whereby customers can conveniently store all of their collected points in a digital wallet and use the same to make transactions, therefore encouraging engagement.

Blockchain also connects different owners of loyalty programs and makes the points they distribute interoperable: customers no longer have to keep track of dozens of different programs and can do so from their respective wallets. Customers can also exchange their loyalty points with other users, which again increases their utility.

5. Blockchain offers real value outside of the brand context.

Customers often complain about the lack of reward options available with loyalty programs, and along with the lack of cohesiveness, it is easy to see why customers would abandon their loyalty programs. With blockchain, tokens that brands give out are tied to other digital assets which render them valuable in another sense: customers are no longer forced to spend their loyalty points with a specific brand, or even other brands within the ecosystem, as they can choose to sell their tokens for fiat and spend the money in the real world!

More importantly, these tokens can rise in value without any further investment from the customer.

In conclusion, blockchain’s merits are manifold and effective for tackling the loyalty market’s inherent issues: for brands, blockchain significantly reduces costs, tackles security issues, and increases customer engagement, while for customers, this means a convenient use of different loyalty programs in one go while profiting from a myriad of redemption options, which ensures that they will stick around in the long run.

qiibeeThis guest post was contributed by Gabriele Giancola, the co-founder and Chief Executive Officer of qiibee, the Swiss loyalty token protocol helping brands around the world run their loyalty programs on the blockchain. 

*Readers should do their own due diligence before taking any actions related to the company, product or service. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this article.*

Blockchain Technology

Vodafone Ghana Introduces Blockchain Programme for Technology Students

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Vodafone Ghana

Vodafone Ghana in collaboration with IBM, HackLab Foundation, and Stanbic Bank has introduced a blockchain technology programme for technology students at the Kwame Nkrumah University of Science and Technology (KNUST). The aim of the programme is to promote digital innovation in Ghana.

The Hacklab Foundation Hackathon

The blockchain programme took place at Hacklab Foundation’s hackathon held on April 19, 2019, at KNUST. The programme was based on the theme: “Can blockchain technology transform the services sector?”

Hacklab Foundation is a non-profit organisation based in Ghana that instills skills in the youth in preparation for the job market while connecting them to potential employers.

Vodafone GhanaAs GhanaWeb reported, the hackathon attracted 600 developers from more than 18 institutions across Ghana with the purpose of finding blockchain-based solutions for the country’s market and for the entire continent. Vodafone Ghana will help the developers that had the best solutions from the hackathon to execute their ideas.

“Our status as a leading telecom company in Ghana means we have the power to drive change in our society and this is one of the many avenues we are deploying to accelerate Ghana’s digital journey,” said Vodafone Ghana’s Enterprise Business Director Angela Mensah-Poku.

According to a statement from Vodafone Ghana, the blockchain technology programme will revolutionise how student developers think.

“Blockchain technology is a very fascinating concept which has captured the attention of the world and this hackathon is a demonstration of our commitment to lead a digital revolution in Ghana. We are always excited about the opportunity to unearth young talents in the digital technology sector,” Angela added.

Promoting the Digital Revolution in Ghana

Vodafone Ghana has been promoting the digital revolution in Ghana for more than three years, the telco company said in the statement. This has been done through the implementation of a digital strategy that is all-inclusive. Vodafone implements its strategy through annual hackathons, national digital coding, and the youth skills and jobs portal.

Vodafone Ghana was recognised as a digital leader at the Ghana Business Awards in 2018.

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Blockchain Technology

Mauritius-based Horizon Africa Launches Blockchain Education Platform for Africans

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Horizon Africa

Mauritius-based technology firm Horizon Africa has launched a new platform aimed at educating Africans about blockchain technology and encouraging startups, corporations and public sector institutions to utilise it.

An Ethereum-based Network for Africa

Horizon AfricaHorizon Africa is an Ethereum-based blockchain platform that offers blockchain solutions and facilitates DApp development. The Horizon Africa Blockchain Network (HABN) aims to apply blockchain to a number of industries including fintech, digital healthcare, education, governance and more.

According to the company’s co-founder, Suyash Sumaroo,

“Even though the public Ethereum (blockchain) has been available for years, the blockchain landscape in African countries has not developed much. There is a gap which is being filled by Horizon Africa. Its focus is not about creating a network or increasing the value of its token, but instead to allow people to learn about using the network. Building prototypes and ultimately real solutions is a large part of the mission,” he stated in an ITWeb Africa interview.

To make this dream a reality, Horizon Africa aims to involve African developers in the creation of blockchain solutions. The HABN network will provide a ‘test bed’ for local developers to design and deploy DApps that solve specific challenges in areas such as identity management, land registry, supply chains, gaming, and agriculture.

Sumaroo believes the uptake of blockchain-based products in Africa will increase within five years. He argues that Horizon Africa’s platform will play an important role in enabling African companies, startups and governments to learn about the technology, develop an implement blockchain systems.

Investing in Jobs of the Future

The platform launch comes after comments shared by the President of the African Development Bank (AfDB), Akinwumi Adesina, at the 2019 Mo Ibrahim Governance Week, where he urged African governments to move away from “investing in the jobs of the past, but rather in the jobs of the future.”

He stated that Africa should position itself to maximise on the opportunities brought by digital technologies such as blockchain, AI, big data analytics, and 3D printing. Sumaroo mirrors the same belief and reiterates that blockchain technology will play a critical role in industries such as finance, agriculture and the public sector in the future of Africa.

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How to Bridge the Gap Between Blockchain Hype and Adoption in Kenya

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Blockchain Hype

The blockchain has garnered a lot of hype thanks to its potential to disrupt various industries from healthcare and banking to the supply chain and elections. However, there is still a huge gap between blockchain hype and actual implementation.

BitcoinAfrica.io spoke with Kingsley Ndiewo, CEO of Nairobi-based blockchain development and education startup Funtrench, to hear his views on how this gap can be bridged.

Awareness is Everything

The first step towards moving from a lot of talk about what the blockchain could do to adoption is awareness. According to Ndiewo, the Kenyan government and the private sector should spearhead the sensitisation of civil servants, policymakers, and the public.

Nairobi“When government functionaries are well-informed about the technology itself then they can better push for adoption within government bodies and recognise the benefits that accrue from widespread adoption. Institutions such as NITA and TVET can be equipped to train blockchain skills at a vocational level through private sector partnerships,” he said.

The National Industrial Training Authority (NITA) and the Technical and Vocational and Educational Training (TVET) programs focus on instilling hands-on skills to learners. Ndiewo believes that for blockchain technology adoption to actually happen, hands-on training is important as well.

Moreover, for real blockchain adoption to take place in Kenya, the private sector needs to develop market-ready blockchain solutions.

“Only by well-implemented and viable solutions being in use can adoption become possible. A sensitised government will provide opportunities for the private sector to implement blockchain-based solutions,” he added.

To this end, little is being done towards increasing awareness and executing blockchain-based solutions in Kenya.

For instance, the Kenyan government created a Blockchain and AI Taskforce in 2018 whose report is yet to be released publicly while only a handful of companies – such as Twiga Foods and the Kenya National Chamber of Commerce and Industry (KNCCI) – have announced partnerships for blockchain-based solutions.

Leading by Example: Blockchain Solutions and Education

With less than a year in the blockchain space, Funtrench is eager to make a change with its three blockchain-based solutions, Ndiewo noted.

Funtrech

The first solution the technology company is working on is a portable DLT. This solution will offer a portable solar-powered blockchain network.

The second solution is SACCO Chain, a mobile app that seeks to solve the challenge of fractional ownership of machinery, vehicles, and other assets.

Ndiewo explained: “Fractional ownership is a key aspect of table-banking and SACCO operation in Africa. The solution will manage member elections on investment and administrative decisions and manage revenue distribution and virtual meetings.”

The third solution is Ganji, a cross-border payments and asset exchange platform. The solution solves the issue of cross-border trade in Africa and the high-cost of remittances.

Additionally, Funtrench has partnered with US-based certification company Blockchain Training Alliance (BTA) to offer blockchain education courses such as Blockchain Business Foundations, Blockchain Security Professional, Blockchain Solutions Architect, Blockchain Developer Hyperledger, and Blockchain Developer Ethereum.

The Nairobi-based startup is also working with organisations such as Oshwal College, AkiraChix, BlackRhinoVR, Kesholabs, Hyperledger Community, Kenya’s Blockchain & AI Taskforce, and Botlab to promote the blockchain and other emerging technologies in Kenya.

Most Kenyan Companies Will Adopt Blockchain in the Next Five Years

In the next five years, the Funtrench CEO envisions an environment where most businesses, including SMEs, will have deployed blockchain solutions in their operations. Moreover, he expects that blockchain solutions in Kenya will be prevalent in government agencies where they will be used to enhance transparency and secure data.

“We expect that blockchain solutions will be as commonplace as databases and their benefits will be more deeply understood by the general public. This will increase confidence in systems that employ blockchain technology and subsequently increase demand for blockchain-savvy professionals,” Ndiewo concluded.

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