Blockchain has paved the way for the development of many online platforms that serve to improve businesses’ digital infrastructures.
From recording COVID-19 vaccinations and tracking raw materials and products on the supply chain to creating a national citizenship registry, blockchain has proven its utility across many different industries.
One of the panels at the recently held BSV Global Blockchain Convention in Dubai discusses how loyalty programs on blockchain revolutionize the marketing industry and allow for countless creative executions to be realized that are geared towards customer retention.
Moderated by Martin Coxall, head of marketing of the BSV Blockchain Association, the panel includes promotional marketplace TonicPow Co-Founder and CEO Luke Rohenaz, gaming platform Haste Arcade Co-Founder and CMO Joe DePinto, investment firm Oceanside Digital Assets President Chad Anderson, and social marketplace Mijem Inc. Chief Strategy and Purpose Officer Phuong Dinh.
Composed of experts in their respective fields within the marketing industry, the panel provides an enlightening discourse about the technical requirements needed for loyalty programs to become more effective for both small and big businesses, as well as the more creative ways of addressing customer retention.
All the panellists agree that the ability of a blockchain for micropayments, which is the sending of very small amounts of money or tiny fractions of a token, is crucial to reinventing loyalty programs and gaining back the trust of customers in businesses.
“I’m obsessed with micropayments—that’s what attracted me to Bitcoin to begin with—and the ability to use them as an incentive mechanism to have customers promoting businesses,” DePinto said.
Before co-founding Haste Arcade with former teammate Daniel Wagner, DePinto, who is a former professional baseball player for the Chicago White Sox, co-founded Barpay in 2015.
Barpay is now the leading venue mobile order and payments platform that serves over 10,000 clients in the United States.
“We service several thousand bars, restaurants and hotels. Basically, with QR codes, the customers can scan to view the menu, order and pay.
"And the last piece of that is once you’ve had your experience, people would go and leave a review,” DePinto explained.
“Since you’re getting the opportunity to earn micropayments for the reviews that you leave on these restaurants, so now, the customers are doing the marketing for the venues themselves in a way where they can earn based on legitimate content,” DePinto added.
This kind of loyalty program is a win-win for both the business and the customer—the business creates buzz and attracts new customers from reviews made by patrons, while customers get to earn rewards for the reviews they have submitted.
"But this only works with micropayments, as customers are being sent fractions of a token or small amounts of money for every valid action they take.
Being able to send small amounts of money would mean transaction fees are so low that it would not be a waste.
"No one would send a dollar, for instance, if they would have to pay $11.16 to be able to send it. And this is actually the average transaction fee of Ethereum at the time this article is written.
"Imagine how many customers visit these 10,000 restaurants, bars and hotels on a daily basis. Now, imagine even if just half of them leave reviews to share their experience and ratings, the number would reach at least 100,000.
"That would mean 700,000 micropayments sent to customers in a week; that would mean cumulatively spending over $7.8 million on transaction fees alone in just a span of seven days.
"No business will ever think of this as practical, and small- to medium-sized businesses will definitely not be able to afford a loyalty program that charges over $11 per review.
The BSV Blockchain, on the other hand, is only averaging between 1/20 to 1/100 of a cent in transaction fees. This makes it practical to send micropayments to a huge number of individuals. Now, the key to low transaction fees is scaling.
The BSV Blockchain has unlocked its ability for unbounded scaling, which means that data block sizes grow bigger, throughput increases and fees are reduced to almost next to nothing as the network scales.
Today, BSV is already at 4GB blocks at a throughput of 50,000 to 100,000 transactions per second (tps).
This makes the BSV Blockchain not only practical but highly efficient. This is also what makes it useful for businesses.
“I think that with today’s modern consumers where people are pivoting more towards ESG, making sure that… they’re consuming legit drugs or want to know that a certain luxury good they’re consuming is valid or whatever, this is where blockchain provides that public ledger where records can be on a chain.
"But we need a chain that’s very cheap to do that functionality,” Dinh shared.
“One of the things that we would be doing in today’s world is something called proof of attendance protocol. And that’s something that a lot of people are doing in the NFT space now, where you come in and you scan in with your QR code.
"And then, this would be something that people could earn rewards on from attending multiple events and get into different tiers the more they attend,” Anderson added
These kinds of innovative executions that incentivize customers through loyalty programs can already change the game when it comes to marketing.
What more when other more immersive campaigns through the use of new marketing technologies are used are implemented.
With a scalable blockchain that offers fast transactions and ultra-cheap fees—and especially when combined with the power of IPv6—anything is literally possible.
“The fact that we’re putting loyalty points and things like this on a blockchain now, they can take new forms. They could be more useful than they were before.
"They can be interoperable with other companies. You can easily make a deal with some partner that is a really good complement to you.
"You can redeem points over here and vice versa because we have a universal database that we can check against. Whereas before, they were all independent systems,” Rohenaz ended.