How Web3 could revolutionize loyalty programs

cointelegraph.com:

Attracting and retaining customers have long been one of the major headaches for businesses all over the world. Companies use several ways to get these customers, and one such way is loyalty programs. These programs have been quite effective in retaining customers. But loyalty programs are not perfect. They have challenges, such as geographical limitations, limited reward options, complex redemptions, etc.

All these issues affect the overall effectiveness of loyalty programs. But Web3 and blockchain technologies like cryptocurrencies and non-fungible tokens (NFTs) can solve these challenges and redefine loyalty programs. Let’s discuss how.

Loyalty points are incentive programs businesses use to encourage customers to spend on their products. Users get more points based on how much they spend, which can be exchanged for more products or better quality services with the company. Loyalty programs are quite common, with everyone from airline companies and hotels to Starbucks offering one form or the other. Even credit card issuers now offer loyalty points.

Advocates of Web3 technologies are usually quick to point out its revolutionary capabilities for almost every industry. While skeptics can question this in other areas, blockchain technology has clear applications for loyalty programs. These include:

One of the reasons for the inefficiency of loyalty programs is the low redemption rates on the part of customers. This is not essentially the customer’s fault. One brand can have several loyalty programs, making management difficult for customers and users. Then, loyalty programs are complex, forcing customers to do a lot of mental mathematics before redeeming their points. With blockchain technology, it could be possible for