Loyalty rewards customers are sitting on a potential gold mine. Customers have accumulated 48 trillion in unspent loyalty points, according to one estimate. Airline rewards program members alone have roughly 30 trillion unspent miles in their frequent flyer accounts, in no small part because redeeming them is still cumbersome.
Thankfully, with the introduction and proliferation of blockchain technology, unlocking these points will become easier and quicker to do than ever.
Paired with an existing rewards program, blockchain has the potential to transform points sitting dormant in customer accounts into a more flexible currency that could be spent on a far wider universe of products.
In doing so, technology can create a new type of allegiance to a brand, as well as help an enterprise with that most essential of tasks such as pursuing a more purpose-driven approach to its business that benefits multiple stakeholders throughout its network.
Loyalty programs date back to American Airlines’ launch of the first frequent flyer program in 1981.
Holiday Inn brought the concept to the hospitality industry in 1983 and National to car rentals in 1987.
These days businesses ranging from your local barbers to your florist use reward programs.
They are valuable because they not only build brand loyalty but can also, at times, drive revenues from third parties seeking to buy a mailing list or piggyback on a brand’s success.
Yet over time customers have found that it’s easier to earn points than to spend them.
Globally, airlines have roughly 288 million active users who earn around 3.5 trillion points per year.
Based on the 30 trillion or so unspent miles collectively sitting in customer accounts, the average member has points over £400.
In other words, people are racking up great stores of loyalty points, but struggle to redeem them. The risk for any business is a program created to build good feelings…