Maximizing the Efficiency of Blockchain Loyalty Reward Programs

Maria Garcia
5 min readDec 15, 2020


Running customer engagement and loyalty programs can both make or break your business. It is since loyalty reward programs act as a strategic investment concerning numerous kinds of businesses. With blockchain loyalty reward programs and smart contract solutions, businesses get to create an ecosystem where their customers can reward each other mutually with the help of a unique program.

What’s Next?

Blockchain loyalty reward programs will be the ones that will set up across all brands that clients interact with, thereby making it the next big trend in loyalty programs. Blockchain technology will assist a wide assortment of organizations out there.

Imagine everything you purchase in a year is a part of a particular loyalty program, and you as a customer, remain dedicated to such brands and get points that keep you returning for more. Sounds interesting right! These loyalty reward programs, backed by blockchain, allow organizations to partner with hundreds of additional companies for bringing dedicated customers who will stick by their side.

Importance of Adopting Blockchain Loyalty Reward Programs

Due to a wide assortment of options customers have while deciding the areas to spend their money, and organizations having difficulty and facing challenges differentiating themselves and standing out from the crowd, loyalty reward programs are turning out to be essential than ever before for organizations to survive.

On the other hand, customers will gravitate towards organizations for earning points, thereby making it convenient for them to remember the particular brands to accrue their points other than seeking processes for accruing points. Therefore, companies are required to integrate to survive and share loyalty rewards data seamlessly, and the way they are going to do this will be via blockchain technology.

Issues Without the Adoption of Blockchain Loyalty Reward Programs

Some organizations apart from understanding the benefits of blockchain loyalty reward programs will still attempt to continue implementing loyalty reward programs without blockchain technology. Experts envision various problems with this:

  • The processing and storing cost of loyalty transaction information will be extremely high across segmented databases without the application of blockchain technology.
  • Organizations cannot trust information from their partners without the presence of blockchain.
  • If accounts are updated without the presence of blockchain technology it will lead to a lack of speed, thereby leading to attrition in loyalty reward programs.
  • Organizations not adopting the integrated network are likely to find themselves losing out on repeat clients and isolated among others. Moreover, they will not be able to team up with huge loyalty reward programs as compared to their competitors.

Solutions With the Adoption of Blockchain Loyalty Reward Programs

Implementing blockchain loyalty reward programs can lead to the organizations reaping the following advantages.

  • Blockchain loyalty reward programs are likely to generate more sales by making the programs broader so that each of the brands that clients interact with providing them with loyalty points.
  • Blockchain-based reward programs can decrease program costs by reducing the burden on all organizations maintaining loyalty programs particularly for every company and enable a focused and particular group for maintaining the reward program throughout the partner network.

In this manner, they are likely to save the particular company’s money and time by allowing the developers and admin to focus on creating enhancements to their organizations and facilitating a small group of people to maintain the loyalty reward programs throughout the organizations that invested within the network.

  • Data privacy is likely to be robust because all transactions will be encrypted within the network of blockchains.
  • Fraudulent points are likely to be restricted because all transactions will be verified by blockchain and no false data from additional organizations are likely to be added to the network. If any company attempts to add suspicious point transactions within the network, it will be restricted.
  • Blockchain loyalty reward programs will provide customers with a better experience by making those programs quicker by immediately tallying up reward points, thereby making it simpler to spend within a particular user interface. Customers can easily tally up their reward points across all accounts.

Challenges in Blockchain Loyalty Reward Program Management

Customer loyalty reward programs throughout numerous industries remain within a debilitated state, apart from rapid growth. As per reports, rewards and loyalty programs do not happen to realize their full potential. Moreover, it is because of the numerous challenges including time delays, low retention rates, inefficient system management, customer account inactivity, high transaction, low client retention, and high customer acquisition costs.

Apart from these, there are additional causes for such inefficiencies as well. The first and foremost highlights the paucity of unified rewards and loyalty management systems. It leads to confusion among clients and remains a significant factor for the lack of member inactivity.

Eliminating the Pain Points: Blockchain Comes Into Action

Being an immutable distributed ledger, the technology of blockchain allows participants, like system managers, reward program providers, customers, and administrators to interact and intersect utilizing a robust system.

It is a system that works without the involvement of intermediaries, thereby not compromising competitiveness or privacy. For blockchain loyalty reward program providers, the solutions of blockchain can help streamline the administration and execution of new programs by offering near real-time transparency.

Blockchain loyalty programs have a competitive benefit through scale, and interacting with a blockchain-based network happens to be a trade-off worth making. Joining a blockchain-based network can be done on personalized terms when it comes to organizations, thereby managing the ways to interact with reward programs.

Deployment of Smart Contracts

The application of blockchain technology deployment now incorporates digital wallets and social media with smart contracts. With the help of smart contract solutions, a blockchain network can communicate with previous loyalty program platforms. Smart contracts happen to be the self-executing code within a blockchain network, thereby implementing the terms of agreements within transacting parties in the associated architecture.

Implementing Blockchain

Approximately 55% of organizations state that the greatest obstacle to adopting blockchain technology is finding experienced and skilled developers having the capability to build a blockchain. In that case, organizations choosing to adopt blockchain technology require training their already existing resources. Moreover, those organizations also require to identify additional organizations who have already begun their blockchain path, thereby helping them partner with them and begin reaping the benefits of a trusted partner network.

When it comes to blockchain loyalty reward programs, those organizations not partnering with others might lose out on loyal customers when they discover better ways for spending their money. Therefore, solving these tough challenges for tackling competitors is possible by leveraging blockchain.



Maria Garcia

Passionate about blogging on Cryptocurrency, Blockchain applications, Artificial Intelligence & IoT.