Loyalty programs hold immense value for consumers, often influencing brand preferences. Yet, they could be even more effective with the integration of blockchain technology.
Maintaining and growing a customer base has always posed significant challenges for businesses worldwide. Many have turned to loyalty programs as a solution, which have proven quite successful in fostering customer retention. However, even these programs are not without their shortcomings, such as geographic constraints, limited reward choices, and convoluted redemption processes.
These challenges compromise loyalty programs’ overall efficacy, but the rise of Web3 and blockchain technologies, such as cryptocurrencies and non-fungible tokens (NFTs), offer promising solutions. Let’s delve into how.
Loyalty points serve as incentive schemes employed by businesses to stimulate customer spending. The more customers spend, the more points they accumulate, which can be redeemed for additional products or superior services. Ranging from airlines and hotels to Starbucks and credit card issuers, loyalty programs are widespread.
Web3 technology advocates often highlight its transformative capabilities for virtually every industry. Despite potential skepticism, blockchain technology has clear applications for loyalty programs, such as:
Low redemption rates, often due to customers’ struggles with managing multiple loyalty programs and complex redemption processes, limit the effectiveness of membership programs. Blockchain technology could enable real-time point redemption and the consolidation of various loyalty programs.
While existing loyalty programs may appeal to older generations, millennials and younger generations are increasingly becoming the primary customer base for businesses. Modern advancements like Web3 technologies will likely attract these demographic groups. For instance, Gen-Z’s interest in NFTs, followed by millennials, implies that loyalty programs leveraging these technologies could draw and retain these user groups.
Most loyalty programs offer points redeemable only for the company’s products or services. Although this encourages ongoing patronage, it can limit the user experience. Incorporating blockchain technology could offer a wider range of reward options, such as converting points into cryptocurrencies or offering digital collectibles.
Web3 technology could lead to innovative loyalty program models like experiential loyalty, which boosts customer engagement by rewarding them for their membership in the brand community. An immersive experience, experiential loyalty offers more than just points, such as digital collectibles, thereby gamifying the experience. This concept is already evident in several move-to-earn platforms.
Nonetheless, the impact of Web3 technologies on loyalty programs will hinge on successful implementation. Beyond the hype, a strategic approach must be adopted to ensure effectiveness:
Complement, Don’t Replace: Companies should not impose blockchain-based loyalty programs on their customers. While blockchain adoption has grown, it’s not yet fully mainstream. A supplemental approach would allow users to voluntarily adopt the new program and businesses to gradually integrate Web3 without immediate pressure for success.
Prioritize User Experience: Blockchain implementation often struggles with user experience. Most interfaces fail to bridge the gap between blockchain technology and traditional internet, limiting adoption. However, a well-designed user interface can mask the technicalities of blockchain, creating a seamless Web2-like experience for users while slowly introducing more advanced Web3 concepts and applications.
Manage Trading and Speculation: If a business includes NFTs in its loyalty program, it must consider the potential for trading. While trading NFTs can attract speculators, this could detract from the experience of genuine customers. Therefore, businesses should design their rewards program to target the right customers and discourage excessive speculation.
Loyalty programs have a significant impact on consumer behavior, often dictating brand preferences. With the integration of blockchain technology, these programs stand to be even more compelling. It’s no surprise that many brands are already leveraging this potential. However, widespread mainstream adoption is still on the horizon, and a strategic approach is key to long-lasting, sustainable impact.”
Remember, the successful implementation of Web3 technologies in membership programs is not about replacing the old with the new, but about enhancing the user experience, expanding reward options, and keeping pace with the digital evolution. As we navigate this exciting new frontier, businesses have a unique opportunity to revolutionize their approach to customer loyalty and engagement.
At Enefty, we have already launched dozens of loyalty programs for companies from multiple industries.
We are a web3-powered membership platform. Our team will help you supercharge loyalty and reinvent the connection between your brand and customers. Contact us and get started today.
Enefty Technologies UG. (haftungsbeschränkt)
c/o Giorgi Jashiashvili Weitlingstr.93, 10317 Berlin, Germany
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Detailed information on the processing of Personal Data
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Personal Data processed: Tracker; Usage Data.
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Mailchimp is an email address management and message sending service provided by The Rocket Science Group LLC.
Personal Data processed: email address.
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Personal Data processed: Usage Data.
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The means by which the Personal Data of the User is collected and processed.
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This privacy statement has been prepared based on provisions of multiple legislations, including Art. 13/14 of Regulation (EU) 2016/679 (General Data Protection Regulation).
These Enefty Platform Terms (these “Terms”) apply between Enefty Technologies UG (haftungsbeschränkt) (“Enefty”) and the users of the Platform (“User”).
In these Terms, the following legal definitions apply:
“Account” means a User’s account on the Platform.
“Auction” means the event carried out on the Platform by means of which NFTs are sold/purchased at an auction.
“Bidder” means a User who participates in an Auction by submitting a bid in order to purchase an NFT.
“Commission” shall have the meaning as set forth in Clause 5.1.
“Creator” means the person who owns the copyright in the Media and/or in the NFT offered on the Platform.
“Enefty” shall have the meaning as set forth in Clause 1.
“Fixed-price Sale” means the event carried out on the Platform by means of which NFTs are sold/purchased for a pre-defined price.
“Platform” means the online platform operated by Enefty facilitating the sale/purchase of NFTs.
“Media” means any Seller-owned audio-video, images, names, titles and audio files associated with the NFT sold/purchased on the Platform.
“NFT” means any blockchain-tracked, non-fungible token.
“Purchaser” means a Bidder who wins an Auction in accordance with Clause 4 or a User who purchases an NFT on a Fixed-price Sale.
“Purchase Price” means the price actually received by the Seller from the Purchaser on the basis of a Sales Contract.
“Sales Contract” means the contract between the Seller and the Purchaser on sale/purchase of NFT(s).
“Seller” means a User who (i) is the Creator or a person authorized by the Creator for sale, and (ii) offers an NFT on the Platform for sale.
“Terms” shall have the meaning as set forth in Clause 1.
“User” shall have the meaning as set forth in Clause 1.
“Wallet” means a crypto wallet of the User.
3. Scope of User’s Account on the platform
3.1 The User’s Account on the Platform will be associated with the User’s linked blockchain address and display the NFTs for that blockchain address (and, if applicable, any content associated with such NFTs).
3.2 By using the Wallet in connection with the Enefty, the User agrees to be using that Wallet under the terms and conditions of the applicable provider of the Wallet.
3.3 Wallets are not operated by, maintained by, or affiliated with Enefty, and Enefty does not have custody or control over the contents of the Wallet and has no ability to retrieve or transfer its contents. Enefty assumes no responsibility for, or liability to User, in connection with User’s use of Wallet and gives no representations or warranties regarding how the Platform will operate with any specific Wallet.
3.4 User is solely responsible for its Account and any associated Wallet and Enefty is not liable for any acts or omissions by User in connection with User’s Account or as a result of User’s Account or Wallet being compromised. User should immediately notify Enefty in writing (simple e-mail to be sufficient) in case of discovering or otherwise suspecting any security issues related to the Platform or User’s Account.
4.1 The technical processing of a sale is described on the Platform. The Users shall abide by all instructions contained on the Platform in this connection.
4.2 A sale can take place either in the form of a fixed-price sale or in the form of an Auction. In both cases, a Sales Contract is concluded between the Seller and the Purchaser. The processing of an Auction is further described in Clauses 4.3 and 4.4.
4.3 Within 5 calendar days after completion of the relevant Auction, the Seller is entitled to select a Bidder to become the Purchaser of the respective NFT, as a result of which a Sales Contract is concluded between the Seller and the Purchaser. In the event that the Seller fails to make a decision within the time period defined in this Clause 4.3, the Auction shall be deemed canceled.
4.4 In the event that the Purchaser as selected by the Seller under Clause 4.3 fails to pay the Purchase Price to the Seller, the Seller is entitled to decide whether (i) to select another Bidder, or (ii) to cancel the Auction. The Bidders hereby agree and acknowledge that they may become a Purchaser even if they have not been selected by the Seller in the first place under Clause 4.3. In the event that the Seller fails to make a decision within the time period defined in this Clause 4.3, the Auction shall be deemed canceled.
4.5 The User acknowledges that, in respect of a Sales Contract, Enefty only acts as a broker and shall not become a contracting party to any Sales Contract. Therefore, Enefty is not liable to a User for any obligations out of or in connection with a Sales Contract, including but not limited to for any benefits and perks promised by a Seller to the prospective Purchaser in the course of the sale of an NFT.
5.1 For the introduction of opportunities to enter into Sales Contracts and/or for the facilitation of such Sales Contracts, Seller shall pay to Enefty a commission in the amount of 5% of the Purchase Price (“Commission”).
5.2 Enefty shall be entitled to retain the Commission from the Purchase Price paid by a Purchaser to a Seller by means of a payment method provided for on the Platform. In the event that the Seller receives the full Purchase Price from a Purchaser directly, the Seller shall pay the Commission to Enefty within 30 days following the Seller’s receipt of a corresponding invoice from Enefty.
5.3 Any action of Enefty that may be deemed a contributory cause for the conclusion of a Sales Contract shall entitle Enefty to the Commission. In particular, Enefty shall be entitled to the Commission even if Seller and a Purchaser conclude a Sales Contract outside the Platform. Seller shall immediately notify Enefty of such Sales Contracts.
5.4 Subject to Clause 3.3, a subsequent change to or subsequent ineffectiveness of a Sales Contract, including but not limited to rescission (Rücktritt), withdrawal (Widerruf), avoidance (Anfechtung), mutual cancellation (Aufhebungsvertrag), the triggering of a condition subsequent (auflösende Bedingung), etc. shall not affect Enefty’s right to the Commission.
5.5 Subject to Clause 3.3 any subsequent reduction of the Purchase Price (e.g. by means of a subsequent mutual agreement or by a unilateral price reduction under statutory law) shall not affect the amount of the Commission.
6.1 Seller shall, in a timely manner and in the format requested by Enefty in each case, provide Enefty with all information and documents required under this Agreement, including any and all information pertaining to the Sales Contracts and the Commission.
6.2 Seller represents and warrants that (i) it is the Creator of the NFT offered by it on the Platform or a person authorized by the Creator for sale, (ii) the Media related to the NFT is not subject to any third party rights and that any documentation, and (iii) the information provided by Seller on the Media is accurate, true and complete. Seller shall indemnify and hold harmless Enefty from any third party claims in that respect including but not limited to appropriate costs of legal defense and prosecution.
6.3 For the period of time in which a sale/purchase of an NFT is processing, Seller shall, without the prior written consent of Enefty (simple email sufficient), not be entitled to (i) sell or seek to sell the respective NFT outside the Platform, (ii) sell or seek to sell another NFT of the same Media outside the Platform, and (iii) create another NFT of the same Media.
7.1 German Law shall apply. The place of jurisdiction for all disputes arising out of or in connection with these Terms shall be Berlin, Germany.
7.2 The Users may only set off their claims against those of Enefty or exercise a right of retention to the extent that the User’s claims have been finally determined in a binding judgment which is not subject to appeal, or are undisputed or accepted.
7.3 In the event that a provision of these Terms is or becomes wholly or partially invalid or void, the validity of the remaining provisions of these Terms shall not be affected. In place of the invalid or void provisions, statutory law shall apply.
Enefty Technologies UG (haftungsbeschränkt)
c/o Giorgi Jashiashvili
Commercial Register: HRB 232814 B
Registration court: Amtsgericht Charlottenburg
Sales tax identification number according to § 27 a of the Sales Tax Law:
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